Wednesday, May 5, 2010

Merrill Lynch – The World’s Leading Financial Advisory

Pillar of Wall Street

Merrill Lynch, one of the pillars of Wall Street, stockbroker of Main Street and the world’s leading financial management and financial advisory company was founded with the idea that everyone, not just the wealthy, should have the chance to invest in the financial markets.

It came into existence to realize the importance of providing small investors with conservative, sound and simple financial advice that would make them understand and participate in buying stocks and bonds in the financial industry.


The company was founded in 1914 by Charles Edward Merrill, a Florida-born broker of New York. The firm had its first office in the seventh floor of 7 Wall Street. Less than a year, Mr. Merrill and some partners expanded the firm into a brokerage company with a name Charles E. Merrill & Co. That former name of Merrill Lynch was so resounding that some Wall Street jokesters said that the firm’s name sounded like a beer barrel which is being rolled downstairs. Years after, the financial advisory unrolled itself as the Merrill Lynch, Pierce, Fenner & Beane.

The first of Mr. Merrill’s associate was a young bond salesman whose name was Edmund C. Lynch. Together with some other associates, they struggled and survived, which is a common thing, for firms in Wall Street.

Building a reputation

A bull, the logo of Merrill has been a symbol of Wall Street’s basic optimism. Merrill Lynch leaders have been regarded as spokesmen of the entire financial industry. Merrill Lynch gained the reputation of giving sound financial advisory to companies for financial management and investment banking. The firm has a big contribution to the growth and health of financial markets, in which the society heavily relies on, not to mention its enormous giving to charity.

Merrill Lynch had grown to two companies: one was a wealth-management company that had $1.4 trillion of assets which was managed by 16,000 brokers; and a 49 percent interest in a fast-growing management operation called Black Rock.

The other one was a bond-trading or fixed-income operation which investment was heavy in high-return securities and high-risk backed by sub-prime home mortgages. These securities lost value during the mortgage crisis that started in the middle of 2007, when the prices of housing fell and foreclosures grew. In October 2007, Merrill Lynch posted a write-down of $8.4 billion to recognize the decline of these securities.

Acquisition of Merrill Lynch by Bank of America

Merrill Lynch, as an independent financial advisory company, survived the Great Depression and wars, but succumbed to the mortgage meltdown by agreeing to be purchased by the Bank of America on September 14, 2008, rather than taking the risk of being pulled down by the turmoil in the industry as other companies had.

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