Bank of America Corp (NYSE:BAC) has spent quite a lot of time analyzing the so-called "mass affluent": customers with investable assets of between $50,000 and $250,000. Currently, the bank has a Platinum Privileges program just for these clients – as long as they maintain at least $50,000 per month in deposits and/or investments with B of A.
Starting today, the bank is lowering that bar. A new offering will target the somewhat-less mass affluent, extending special benefits to those with only $20,000 in assets parked with Bank of America. With the debut of this new Preferred Rewards program, the Platinum Privileges will eventually be phased out.
Truly "mass" affluent
Bank of America is casting a very wide net in its courtship of wealthy clients as it pursues new ways to bring in revenue. As Reuters notes, this category of customer is much more profitable than those with fewer assets, as the bank is able to pitch more – and, no doubt, pricier – banking products to these clients.
Last year alone, B of A's preferred banking section, which has focused on the mass affluent since 2011, sent an additional $935 million into the waiting arms of Merrill Lynch and U.S. Trust money managers.
While somewhat hush-hush, the change has obviously been in the works for some time. Questions regarding Bank of America's closing of the Platinum Privileges program to new clients surfaced on Yahoo! Answers in mid-March, while a mock-up of the new webpage for the Preferred Rewards program notes that the redesign began in 2013.
More changes could be on the way
The Preferred Rewards page includes an interactive feature that allows customers to see exactly what benefits their accumulated assets can earn for them at Bank of America. For now, at least, there are four tiers, including Platinum and Platinum Honors. Some of the rewards available at the $20,000 level include higher credit card rewards points, as well as a $200 credit on a residential purchase or refinance loan.
Currently, customers need a B of A checking account, in addition to the $20,000 cumulative account minimum, to qualify. It looks like there might be changes coming to the checking account offerings, as well – with another webpage design displayed here, noting a shake-up in how Bank of America plans to market both checking and savings accounts.
Bank of America has emulated the cross-selling savvy of its peer Wells Fargo for some time now, and it looks like the focus is paying off. As an added bonus, extending special benefits to customers with less than $50,000 in assets may help to soften some of the hard feelings the general public has developed about the bank since the financial crisis. All in all, this new direction looks like a definite winner.