By Margaret Collins and Alexis Leondis

June 18 (Bloomberg) — Bank of America Corp., the largest
U.S. bank by assets, is trying to attract investors with less to
invest through a new online trading site.

Bank of America’s Merrill Lynch, the world’s largest
brokerage with more than 15,000 financial advisers and about
$2.2 trillion of client assets, will let customers trade stocks,
mutual funds and options online starting June 21, through
Merrill Edge, Dean Athanasia, head of banking and the direct
investment division for Bank of America Global Wealth and
Investment Management, said in an interview.

“It’s an integrated bank and brokerage offering” that
will compete with companies such as Charles Schwab Corp. and
closely held Fidelity Investments, said Athanasia, who is based
in New York and Boston. The site will target customers who have
$250,000 or less to invest, those with “emerging wealth” or
self-directed investors, he said.

Customers of Merrill Edge will pay from $4.95 to as much as
$8.95 a trade depending on the size of their accounts, Athanasia
said. Those with at least $25,000 in total banking and brokerage
accounts will get 30 free equity trades a month. Users may open
investment and retirement accounts on the site and those with
more than $20,000 to invest may contact advisers, who are
separate from Merrill Lynch’s full-service advisers, by phone.

Schwab, based in San Francisco, charges $8.95 for all
online stock trades regardless of account balances, how many
shares are traded and how often shares are traded, according to
the company’s website.

Trading Costs

Fidelity, based in Boston, generally charges $7.95 for
online U.S. equity trades, and TD Ameritrade Holding Corp.,
based in Omaha, Nebraska, charges $9.99 for online stock trades.
New York-based E*Trade Financial Corp. charges from $7.99 to
$9.99, depending on the number of trades.

Steve Austin, a spokesman for Fidelity, the world’s largest
mutual-fund manager, declined to comment on Merrill Edge. Greg
Gable, a spokesman for Schwab, also declined to comment.

Schwab, TD Ameritrade and E*Trade, the largest U.S.
independent online brokers, fell in stock trading yesterday
after Bank of America’s plans were reported by the Wall Street
Journal.

It’s “highly unlikely” that Merrill Edge will cause a
significant number of existing clients to leave Schwab, TD
Ameritrade or E*Trade, and the initial negative market reaction
is an “overreaction,” Raymond James Financial Inc.’s Patrick
O’Shaughnessy, an analyst, and Megan Repine, a research
associate, wrote in a research note yesterday.

Re-Branding Effort

“We believe this is simply a re-branding of Bank of
America’s existing online brokerage,” said O’Shaughnessy and
Repine, who are based in Chicago. Merrill Edge may lead to more
financial advisers leaving the firm because they fear the
platform might cannibalize their clients, they said.

The firm’s full-service advisers target high-net-worth
clients with complex needs while the online site is aimed at
investors who choose to be self-directed, said Selena Morris, a
spokeswoman for the Charlotte, North Carolina-based bank.

“The attrition rate for clients that have both a full-
service and a self-directed account is half of those with only a
full-service relationship,” Morris said.

To contact the reporters on this story:
Margaret Collins in New York at
mcollins45@bloomberg.net.
Alexis Leondis in New York
aleondis@bloomberg.net.