Bank of America Targets Wealth Growth Amid Major Industry Shifts

BOSTON, MA — Bank of America recently hosted its first investor day since 2011, revealing bold growth targets for its wealth management division. CEO Brian Moynihan outlined a strategy aimed at achieving 4% to 5% net new asset growth in Merrill Wealth Management over the next three to five years.

The bank’s goals include nearly doubling revenue growth in comparison to expenses, with a target return on allocated capital increasing to 30% for the wealth segment. Moynihan emphasized the significant opportunity in the U.S. wealth business, citing over 20 million millionaires in America compared to around 6 million in China.

“The U.S. is on the cusp of a generational wealth transfer, with an estimated $84 trillion moving from Baby Boomers to heirs and charities by the mid-2040s, reshaping financial services and family dynamics,” Moynihan stated during a roundtable with reporters.

Bank of America competes with other banking giants, such as JPMorgan and others, who are also expanding their wealth management services. The bank holds approximately 14% market share in the ultra-high-net-worth segment.

Katy Knox, president of Bank of America Private Bank, noted, “Our national footprint covers 90% of the wealth opportunity across the U.S., and we are aligning resources to capture it.” The bank is investing heavily in its advisor base, with around 15,000 advisors currently employed.

The need to recruit new advisors is pressing for organic growth. Lindsay Hans, co-president of Merrill Wealth Management, explained that the bank’s advisor development program is comprehensive, taking new hires from foundational skills to advanced roles.

Moynihan pointed out that incorporating advanced technology, including artificial intelligence, can enhance talent acquisition and advisor-client relationships, particularly appealing to younger professionals.

Merrill’s Advisor Match program, which uses AI to connect clients with the best-suited advisors, is one of the initiatives aimed at improving service efficiency. “These advancements are essential for fostering client development and building long-term relationships,” he added.

In terms of financial performance, Bank of America has raised its medium-term target for return on tangible common equity (ROTCE) to 16%-18%, up from previous guidance of mid-teens. The bank experienced a ROTCE growth of 15.4% in the third quarter, compared to 20% from JPMorgan.

As the wealth management sector evolves, both Bank of America and its competitors are adapting strategies to attract new clients, particularly among Millennials and Gen Z.