Merrill Lynch

In early 1999, Merrill Lynch and other full-service financial service firms were under relentless assault. The advent of electronic trading and the commoditization of trading threatened the very core of Merrill Lynch's value proposition — to provide advice and guidance through a financial consultant. In response, management decided to create a new offering to provide investors with more choices. A team developed two models to evaluate different combinations of product structures and prices. The models showed that revenue at risk to Merrill Lynch ranged from $200 million to $1 billion. The resulting Integrated Choice strategy enabled Merrill Lynch to take the marketplace initiative, changed the financial services landscape, and mitigated the revenue risk. As of year-end 2000, client assets reached $83 billion in the new offer, net new assets totaled $22 billion and incremental revenue from fees and margin interest reached $80 million.