Bank of America Releases Inaugural Merrill Edge Report, an In-Depth Look at the Financial Concerns and Priorities of the Mass Affluent

Bank of America released today the Merrill Edge Report, a new semi-annual study that offers an in-depth look at the financial concerns and priorities of consumers with $50,000-$250,000 in investable assets. The quantitative and qualitative research contained in the report reveals that this group lacks self-confidence in its ability to meet financial goals and hence sacrifices long-term savings for short-term needs.

Despite reports of improving economic conditions, the mass affluent lack confidence that their financial picture will brighten in the near future. Sixty-three percent of respondents believe that preparing for long-term goals such as retirement and college education will only get harder in the future. Nearly two in five (36 percent) consider themselves low-risk investors, and 45 percent said they are more conservative with their investment decisions today than they were a year ago. Nearly half (45 percent) of the mass affluent surveyed believe they will never be wealthy, even though many (75 percent) of them have a household income in excess of six figures, according to the survey.

"The mass affluent have their own set of complex and unique financial needs,” said Dean Athanasia, Mass Affluent and Small Business Segment executive for Bank of America. "By recognizing the distinct financial challenges of these consumers, we are creating solutions and services to help them meet their financial goals.”

Balancing short- and long-term financial needs is a priority for a majority (63 percent) of mass affluent, but they struggle to accomplish both goals. In the last year nearly one in three (28 percent) mass affluent have tapped into their long-term investments, such as retirement and college savings accounts, in order to meet short-term financial demands, including monthly living expenses like bills or groceries (29 percent), and a mortgage payment or car loan (14 percent).

The first step to achieving financial success could be as simple as setting goals based on specific financial issues. While half (51 percent) of mass affluent do not currently have a formal or written plan, among those who have had a plan in the past, nearly 60 percent have successfully met the goals they set.

Qualitative research echoed these sentiments. One respondent said, "I am concerned about building our retirement funds and my children's college accounts (which I had to stop contributing to monthly for now until I get another job). Temporarily freezing our monthly contributions to the college funds was very emotional for me because I felt like my job loss directly hurt my children.”

The mass affluent are also concerned with other long-term and retirement issues, including the rising costs of healthcare (72 percent), ensuring retirement assets last throughout their lifetime (67 percent), and being able to live the lifestyle they want in retirement (58 percent). They are worried about the effects of external factors – like tax reform (62 percent) and the economy (60 percent) – on their personal finances. And, two in five (41 percent) expect to retire later than they did a year ago.

Another qualitative response included, "Ten years ago I hoped to be retired by age 50. Now I am 53 and hope to retire by age 60. By the time I get to 60, I suppose that I will be shooting for 70.”

"Given this range of concerns, it’s no surprise the mass affluent are looking for ways to increase their confidence in meeting financial goals,” said Athanasia. The Merrill Edge Report showed the mass affluent would like to:

• Know more about how federal and local regulations affect finances and investments (67 percent).
• Have access to a complete picture of finances and investments in one place (58 percent).
• Know how to appropriately allocate assets across investment options (57 percent), more about the financial markets (55 percent), and how to better manage cash flow (50 percent).
• Receive professional financial advice (56 percent).

"Our Merrill Edge clients can view and access their banking and investing accounts in one place online, which we know gives them a better understanding of where things stand and saves them time,” said Alok Prasad, head of Merrill Edge. "Plus, now they can get financial guidance from the Merrill Edge Advisory Center that takes into account the full breadth of their financial situation and helps them set more effective and specific financial goals and better meets their unique style of financial management.”

The report also showed that the mass affluent seek trusted financial advice from financial professionals (53 percent) and their bank/credit union (52 percent) considerably more often than their friends and family (36 percent). Additionally, the mass affluent are highly satisfied with the advice they receive from financial professionals (78 percent) and their banks/credit unions (75 percent).

Merrill Edge Report Methodology

Braun Research conducted the Bank of America Merrill Edge Report survey by phone between Nov. 17, 2010 and Dec. 7, 2010 on behalf of Bank of America. Braun contacted a nationally representative sample of 1,000 mass affluent in the United States with investable assets between $50,000 and $249,999, and oversampled 300 mass affluent in San Francisco, Los Angeles, and Chicago. The margin of error is +/- 3.1 percent for the national sample and +/- 5.7 percent for the oversample markets, with both reported at a 95 percent confidence level.

Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with approximately 5,900 retail banking offices and approximately 18,000 ATMs and award-winning online banking with 29 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

www.bankofamerica.com

Merrill Edge is the marketing name for two businesses: Merrill Edge Advisory Center, which offers team-based advice and guidance brokerage services; and a self-directed online investing platform. Both are made available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S).

MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corporation.

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