Merrill Lynch’s decision to close down a number of unprofitable UK private-client accounts made national news coverage over the weekend. But...

Merrill Lynch’s decision to close down a number of unprofitable UK private-client accounts made national news coverage over the weekend. But the firm said that only a small number of accounts would be affected by the decision, despite the press coverage that suggested otherwise. The US firm, which is in the process of building up a bigger presence in the UK onshore wealth management sector, sent affected account holders a letter saying: “We have decided to introduce a minimum account level and fee, both of which are not met by your account." The letter added: “As we do not want to charge an increased fee for this service where it is inappropriate to the account size and investment holdings, we regret that we are unable to continue to hold this account open.” Merrill told WealthBriefing yesterday that only 400 accounts would be affected by the move, with only 14 accounts with £250,000 — not as reported in the Sunday Times and the Sunday Telegraph, where accounts affected were worth as much as £500,000. “There are only 400 accounts, with an average account around £50,000,” said Nick Tucker, head of Merrill’s private client business in the UK. “We are moving to one consolidated platform within two years and this is part of the clearing out process associated with this.” He added: “We have been completely upfront and transparent with the process.” The accounts were all in Merrill’s Pershing Platform (provided by the Bank of New York) which was set up in 2000. Around 50 per cent of these accounts are in Personal Equity Plans and Individual Savings Accounts, which cannot be transferred to offshore Merrill accounts due to tax restrictions. Non-ISA and PEP accounts were offered to switch to Merrill’s global offshore platform. A spokesman for the Association of Private Client Investment Managers and Stockbrokers told WealthBriefing: “The Sunday Telegraph contacted us (about the Merrill letter), as they wanted more examples of firms ‘sacking’ their clients. We didn't get involved—brokers get enough bad press as it is!” He added: “I think there is an interesting story along the lines of ‘one firm's cast-off clients could become another firm's most valuable assets’ There's plenty of room for everybody — it’s just a question of finding the broker who specializes in your type of business.”