Bank of America’s free planning tool could benefit advisers too

Bank of America’s launch of a free financial planning tool will help address investors’ heightened appetite for long-term plans, but is also designed to steer non-advised clients toward managed relationships with advisers, according to the company. 

Life Plan, is currently available nationwide via a mobile app, according to the announcement, where customers can also gain access to Bank of America advisers. Down the road, the tool may also funnel clients into Merrill Lynch, particularly those consumers flirting with the idea of working with a human adviser, according to Eve Varner, digital planning executive at Bank of America. 

“We’re delivering it to folks so it can manifest differently for everybody — no matter your level of wealth and life stage,” Varner said.

The tool is quickly gaining traction. More than 475,000 banking customers have created a financial plan with the tool since its launch Oct. 5, and is available to all of the bank’s nearly 40 million active banking users.

Linking short-term spending and saving behaviors with long-term goal planning helps Bank of America cross-sell between its banking and investing operations, Varner said. “We have a roadmap for expansion that includes bringing Merrill Lynch advisers into the mix, but the timing of that is to be determined” she said, noting the initial launch of Life Plan is to engage with non-advised clients. 

The freemium approach to planning helps companies sell more products and increase wallet share, and Bank of America is just the latest in a list of firms to offer free tools to mainstream financial advice. Charles Schwab launched the free digital financial planning tool Schwab Plan, a self-guided digital financial planning tool designed to help investors establish retirement goals and stay the course, and an online financial planning hub with goals-based calculators, related tools and educational resources. 

Fidelity Investments also launched its free mobile app, Fidelity Spire, to attract young investors and establish long-term relationships with prospects to move conversations toward proprietary products and services. 

This is also an opportunity for clients who engage in creating and tracking goals in Life Plan to be interested in investing through Merrill Edge, according to David Goldstone, head of research for Backend Benchmarking. 

“In my opinion, Bank of America is working towards a more seamless integration of investing and banking services,” he said. “Life Plan should help Merrill Lynch increase conversions from the very large pool of banking clients onto the Merrill Lynch investing platforms, specifically the suite of Merrill Edge products.” 

Not only will the tool attract more clients into the Merrill Lynch side of the business, but it also becomes a gateway for clients who may not currently meet asset minimums. While that doesn’t necessarily make them attractive to advisers today, they can be turned into loyal customers for tomorrow, according to Brinker Capital Investment’s Chief Behavioral Officer Daniel Crosby. 

“With the Life Plan tool, Bank of America has the opportunity to show their technical chops, do something nice by way of free tools, and create a positive bank-customer relationship, if only via tech,” Crosby said. “I see the human-tech connection as unavoidable.”

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