The high-net-worth card industry may face a tough year ahead as many people's investments shrivel and they drop from the ranks of the high-net-worth; still, Bank of America's acquisition of top-tier brokerage Merrill Lynch gives the Charlotte NC-based behemoth "a special edge" in this segment where it once lagged, says Brian Riley, a research director with Needham, MA-based TowerGroup.
The top-tier global private banking groups at JPMorgan Chase, Citigroup and Wells Fargo will all have to take notice, Riley says, because BofA's acquisition provides it a distinct advantage in the realm of innovation. "[BofA] was not a leading player," he says. "They certainly have a good-sized private bank, but did not dominate the industry. This puts them in a very strong position at the top end. [Merrill has] the most aggressive product toward that market on the card side, so the offering is terrific and the spend on it substantial." BofA declined to speak about the Merrill Lynch acquisition.