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Bank of America Expands Free Trading to Legions of Merrill Edge Customers

Bloomberg logoBloomberg 12/9/2019 Lananh Nguyen
a sign on the side of a building: Signage is displayed outside a Bank of America Corp. branch in Alameda, California, U.S., on Monday, April 9, 2018. Bank of America Corp. is scheduled to release earnings figures on April 16.© Bloomberg Signage is displayed outside a Bank of America Corp. branch in Alameda, California, U.S., on Monday, April 9, 2018. Bank of America Corp. is scheduled to release earnings figures on April 16.

(Bloomberg) -- Bank of America Corp. is expanding commission-free trading -- again.

The lender said it will give unlimited free stock trades to all customers on its Merrill Edge Self-Directed platform, seven weeks after handing that perk to members of its Preferred Rewards loyalty program. The move, announced in a statement Monday, follows Charles Schwab Corp.’s decision to eliminate charges and acquire TD Ameritrade Holding Corp. for about $26 billion. It all underscores fierce competition in the discount-brokerage business.

“Everyone is aggressive right now, because the question is: How do you prove value, how do you attract clients?” Aron Levine, Bank of America’s head of consumer banking and investments, said in a phone interview. “We want to make sure that all clients who are interested in our platform have access to it in a comparable way to the rest of the industry.”

As other firms face pressure to bulk up through mergers, Bank of America will focus on boosting activity among its existing clients, Levine said. The company has about 66 million consumer and small business clients.

“We look at a client holistically,” Levine said. That means the lender can make money on customers’ broader financial activities, including banking, credit cards and mortgages, rather than focusing purely on brokerage revenue. Any lost revenue from the latest move will be marginal, given 87% of trades were already commission-free, he said.

To contact the reporter on this story: Lananh Nguyen in New York at lnguyen35@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, David Scheer, Daniel Taub

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