Merrill Lynch Online: The Empire Strikes Back

February 15, 2000

Abstract

Cambridge, MA, USA, February 22, 2000

Merrill Lynch Online:  The Empire Strikes Back Report published by  Celent Communications

In a new report titled “ !”, Celent Communications analyzes the Internet strategy of the US brokerage giant Merrill Lynch, focusing on the services provided by Unlimited Advantage and ML Direct. The report also delves into the technology behind Merrill Lynch’s Internet trading system and provides a high level view of the system’s technical architecture. In preparation of this report, Celent Communications was given unprecedented access to materials at Merrill Lynch which were previously confidential.

Members of Celent Communication’s Retail Securities & Investments research service can be download this report electronically by clicking on the icon to the right.

According to the report, after years of hesitation, Merrill Lynch has finally established a coherent Internet strategy to take on the challenges posed by online brokers. By attracting the bulk of mainstream investors, who represent 85 percent of the retail investment community, Celent Communications predicts that by 2003, Merrill Lynch will occupy close to 25 percent of the online brokerage market in terms of customer assets. 

“As the online brokerage industry moves to the next phase of creating an online service which combines a comprehensive suite of online products with financial planning by financial advisors, Merrill Lynch has placed itself in an ideal position to capture a large percentage of the online market share,” according to Sang Lee, the lead author of the report. Lee adds that “with its compelling online service offerings, Merrill Lynch appears ready to challenge the online brokers on their own turf.”

Octavio Marenzi, Managing Director at Celent, states that “we are very pleased to have worked with directly with Merrill Lynch on this report, and to have been given exclusive access to both Merrill Lynch’s business strategy, as well as the firm’s technology strategy vis-a-vis the Internet.”

A Table of Contents is available online.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

February 2000

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Return to report Abstract

EXECUTIVE SUMMARY 3
  Introduction 3
  Background 3
  Internet Services 3
  Internet Technology 4
  Evaluation of Merrill's Internet Strategy 4
  Future Trends 4
INTRODUCTION 5
BACKGROUND 6
INTERNET SERVICES 9
  Unlimited Advantage 9
  ML Direct 11
INTERNET TECHNOLOGY 13
EVALUATION OF MERRILL'S INTERNET STRATEGY 15
  Customer Segmentation 15
  Full Service e-Brokerage 17
  Potential Pitfalls for Merrill Lynch 19
FUTURE TRENDS 22

 

        

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