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Rick
Rick

The two new “preferred rewards” tiers will be called: “Diamond” for individuals with assets of at least $1 million and “Diamond Honors” for accounts with $10 million or more in their bank or brokerage accounts.

Source: https://www.advisorhub.com/project-thunder-week-7-merrill-touts-new-bank-of-america-rewards-program-for-high-net-worth-customers/

MISS
MISS

Has anyone here ever been invited to their advisory panel? Is it useful or worth it to join for any reason? I just received an email invite.

Obviously I don’t want to give them too much private financial info (more than they already have), but if there’s a benefit to it, it might be interesting for me..

Yu
Yu

Doc, do you think if BOA will take the change effective immediately when it announces the change ? Will BOA gives us some lead time?

William Charles

No idea sorry

Bobby
Bobby

If I have to have more than 100k for platinum honors, or they lower the bonus rate I am closing my cards and taking my money elsewhere.

TB
TB

Enjoy tanking your AAoA for no reason whatsoever
Also, you’re not supposed to leave your money there after qualifying for Preferred

bobby
bobby

My money is left invested in Merill, beyond some in a checking account for emergency funds. As for My AAoA, I can afford to burn bridges with lenders that I dont like. Im not churning, and I already have my house and cars paid off, so I dont mind small credit dips because I am consistently above 800.

joE
joE

You make a statement by not putting spend on a card, not by closing it.

mk712
mk712

Actually, putting spend on a card is exactly how you make a statement, because if you don’t put spend on a card then you won’t get a statement.

I’ll see myself out.

Indie
Indie

TB and other Preferred members I have a question about preferred status
One of the benefits of this status is getting upto 4 checking and savings accounts fee-free even if monthly fee waiver requirements (DD or daily balance) are not met
Do you know if the above benefit extends even if don’t leave the money in ?
I believe the credit card bonus benefit continues, I am interested in knowing if the free bank accounts benefit also continue or I will need to change my DD to avoid the fee

MisterBill
MisterBill

I’m sure they will be very disappointed to lose your business.

edp
edp

$250k would put them in line with CitiGold and Chase Private Client.

Rarv
Rarv

Chase private client is down to $150k

new_to
new_to

whats the benefits of chase private

Credit card guy
Credit card guy

I’ve only recently moved into the BoA ecosystem, specifically to get myself to the Platinum Honors tier so I’d get 5.25% cash back on my Customized Cash Rewards cards and 2.625% on either a Premium Rewards or Unlimited Cash Rewards card. I just reached the Gold tier and should reach Platinum in the next two or three months. Platinum Honors will take longer, but with this news I might try to speed things up in the hopes of being grandfathered should BoA nerf the program.

SU
SU

if BoA were to nerf Preferred Rewards, why would BoA grandfather existing people?

Credit card guy
Credit card guy

When they introduced the Unlimited Cash Rewards card recently, holders of the Travel Rewards card were invited to convert their Travel Rewards card into a special version of the Unlimited Cash Rewards card with no foreign transaction fee–the Unlimited Cash Rewards card otherwise has a 3% fee–and were offered a cash bonus if they met minimum spend requirements. I’d been thinking of applying for the Travel Rewards card and am disappointed that I missed my chance at an Unlimited Cash Rewards card without that fee, so I’d rather not risk missing the boat again.

miki80
miki80

They won’t nerf the card, but the 75% bonus is a separate program that’s not part of the card’s actual structure. So if the Preferred Rewards program was axed, you;d still get the 1.5%, but not the 75% bonus.

Greg
Greg

Wait, I didn’t get this offer – was this public/available somehow if you didn’t receive a mailer or however else this was announced? I have two TR cards and would definitely convert them both, especially with a bonus.

Vy
Vy

I’m going to let my Preferred status lapse next month, as I haven’t been using it much this year. My cards will still have Preferred etched on the front.

Dan
Dan

The opportunity cost of having even 100k with ML/ME compared to a broker with low margin rates is already considerable. If they increase more, then it would be not worth it at all.

Simon
Simon

Depends on what you’re doing with that margin. A lot of people could just hold MF/ETF in ME with essentially no downside.

tolikfox
tolikfox

What kind of MF/ETF has no downside, pls do tell

Corey
Corey

The no downside they are referring to is they would held the position regardless. By holding it at Bank of America they satisfy the asset requirement while not parking money in cash in a low interest rate bearing environment

Those investments absolutely are not without risk but that person would have been exposed to that same risk at a different firm.

Dan
Dan

I can hold 20% MORE VTI paying 1.5% interest OR I can get BofA perks. That’s opportunity cost.

N
N

You can long some ES futures if you want a higher beta.

They pay you interest on the margin (which is 0 nowadays but will go up if BM rates goes up)

0x539
0x539

Lots of people have no interest in margins as leverage. If you want to go down that route, why not do SPXL or e-minis for a 20x leverage? That’s opportunity cost, not getting even higher returns /sarcasm

Chad Dankbutt
Chad Dankbutt

Your standard low fee index funds, VTI for instance. To clarify, there’s no opportunity cost here- they’re the same or compatibly sensible investments you’d be parking your money in long term otherwise. There’s obviously the risk the market tanks, but that’s the same risk you’d experience anywhere else. So if you have $100k in assets, parking them in BOA/ML is the same as Vanguard, Schwab, etc

Anton
Anton

There is an opportunity cost. You can participate in fully paid securities lending program at some other brokerage that offers it. As far as I know, Merrill doesn’t offer it, at least at my level.

Slowbrake
Slowbrake

Fully paid securities lending program – that’s a new thing to learn about. Thanks.

Burton

How much do you make from this? I just learned my broker offers this but they don’t give any estimates of how much income this would generate.

robertw
robertw

You are correct. Especially something like Interactive Brokers. Their margin rate is near nothing.

Investor
Investor

FYI assuming you have enough assets to be worth discussing, they’ll lower your margin rate at ML if you ask. Not QUITE IBKR low, but close enough.

Fred
Fred

Love to see the bros mad that not everyone invests the same way they do.

Cyan
Cyan

Since you can’t get margin in an IRA anyway, I have my IRA at Merrill and keep my taxable account at Interactive Brokers. The Merrill IRA holds the same ETFs I would have at any broker, so no opportunity cost to me.
If you don’t have enough in an IRA, then there is an opportunity cost to the worse margin rates when keeping taxable assets at Merrill, but I’m pretty confident that there are plenty of people who aren’t comfortable using margin, and just want to hold ETFs in a cash account, so no opportunity cost to them either.

Eric

How come you didn’t include the option of having stocks in a non-margin, non-IRA brokerage account?

Ryan
Ryan

So keep a retirement account there that cannot be margined…

Yu
Yu

Anyone know how BOA calculates the asset amount to decide the rewards tier and when? Is it once a month or once a quarter?

Tsarinax
Tsarinax

They calculate once a month, but it’s an average of the prior 3 months.

sg77

Tsarinax’s answer sounds right if you’re talking about moving to a higher tier. But if you’ve already reached the tier you want, they won’t check balances to downgrade you except once a year.

Yu
Yu

good to know. I am already on Platinum tier. Do you know when BOA check the qualification again during the year?

sg77

According to the Personal Schedule of Fees, “We will perform an annual review of your qualifying balances in the month following the anniversary date of your initial enrollment in the program. The annual review will calculate your three-month combined average daily balance as of the end of your anniversary month … If the result of the annual review calculation would be to move you to a lower tier, you will have a three-month period from your anniversary month in which to restore your qualifying balance before you are moved to that lower balance tier.”

Card Casper
Card Casper

Once you’re enrolled in the program, the recalculate your average 3-month balance on the 3rd business day of the new month. If you qualify for a new tier, you’ll see it changed the following day. Otherwise it’ll stay the same for a year.

Kevin
Kevin
P
P

They’ll dilute this program like they dilute their stocks.

N
N

More like the government is diluting the value USD using monster infrastructure spending and other bills? Talk about taking a page out of the books of the USSR (and China).

BAC is simply adjusting their tiers in order to reflect the true value of the currency.