WALL STREET LIKES FEW inventions as much as 401(k)s. And Merrill Lynch thinks it has a scheme to use its successful cash management accounts to snag a chunk of those retirement savings when workers cash in.

Using employers as conduits to potential new customers, Merrill is starting Employee Access Accounts aimed at the 67 million U.S. households with annual incomes between $35,000 and $100,000. The accounts, which provide direct deposit of paychecks, are structured almost identically to the existing CMAs for wealthy customers offering checking, credit lines, and brokerage.

It is a brazen incursion on a marketplace controlled more readily by banks and mutual-fund companies. The thinking is that by appearing in employee benefit packages, the Merrill program could establish long-term relationships with workers that would pay off when they retire or change jobs and receive their 401(k) savings. The pilot is limited to 15 small and midsize companies, but Merrill has its sights on big corporations. For employers that decide to participate, there's no cost. But workers pay a management fee of $60 a year.

Lisa Sanders


Updated June 15, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.
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