Though wirehouses offer wider investment choices, they still haven't established full-fledged no-frills/no-fee fund supermarkets like those that discount brokers run.
Merrill Lynch & Co. took a step in that direction last month, but only a step.
The Mutual Fund Advisor Selects program it launched was described as a no-fee transaction mart, and offers access to 2,000 funds from 80 families.
But part of the deal is an annual fee- as much as 1.25% of assets in the portfolio- for advice.
That sets the program apart from the bare-bones supermarket approach taken by firms like San Francisco-based Charles Schwab & Co., said Burton Greenwald, a Philadelphia-based mutual fund consultant.
Schwab's OneSource-a model for other fund marts since 1992-offers 1,100 no-transaction-fee funds from 140 families. Investors seeking the comfort of investment advice, however, have to access Schwab's AdvisorSource referral program to interview independent fee-based financial advisers.
Peter G. Amendolair, director of investment advisory services at Merrill, said customers want the best of both worlds.
"I think it's pretty widely believed that investors want advice and are willing to pay," he said. The program is "the result of clients' asking for advice but wanting to maintain a hand in the investment decision."
The Merrill program "is a supermarket in the sense that all the funds are available at net asset value, without the sales loads," Mr. Amendolair said. "The difference is that it also comes with customized advice."
The minimum investment to enroll is $10,000. The annual fee declines as the investor's assets in the program increase. Investors are assigned financial consultants.
The product certainly gives Merrill a competitive edge, said Mr. Greenwald. It makes sense for investors who "need a little help," he observed.
"Here's a chance to have a ... professional investment representative to guide you, and you're still getting the same product, but you're not paying a transaction fee."
Mr. Greenwald noted that Smith Barney Inc. and Prudential Securities offer a similar program.
And Merrill already has a Mutual Fund Advisor program offering day-to- day management of investor portfolios.
"What's driving all this is that the brokerage firms realize that they can't be product-driven, they have to be client-driven," Mr. Greenwald said. "Schwab has proven the success of that."
Merrill's move shows that wirehouses have been "wrestling with the growing demand for simplified pricing and the need for guidance," said Geoffrey H. Bobroff, a mutual fund consultant in East Greenwich, R.I. But charging for advice means "it's not really a no-transaction-fee program," he said.
"The brokerage community has shied away from ... making things available for nothing," Mr. Bobroff observed.