2. The acquisition of Merrill Lynch gave Bank of America the most premier wealth-management business in the US. With an “army-like force” of over 16,000 advisors these employees generate substantial revenue. This crown jewel holds a wide economic moat without question.
3. Only a small portion Bank of America’s roughly 8 million affluent customers use its in house wealth-management services. At this point the number stands at 1 in 10 or 10%. It could easily increase revenue by a good amount in this division by incentivizing more of its current checking account clients. As well, combined with ML’s advisory workforce there looks to be strong untapped opportunity.
4. Due to Bank of America’s substantial depository base this provides the firm with low-cost and a stable source of funding.
5. Over the long run return on equity (ROE) should continue to improve and some analysts are forecasting a number above 10%.
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