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And then finally we operate at scale. So there is a lot of efficiency and through that scale and expense management we think we can provide opportunities, continue to expand on the profitability that we have today. Andy, maybe a little bit.

Andy Sieg

Great. Thank you. Good morning everyone. Just to pick up where John left off and to echo what Moshe said, the wealth management business is the very significant portion of Bank of America overall. It represents about 20% of Bank of America's overall revenues and if we just look at net income before taxes, global wealth and investment management is about 28% of the overall bank.

The business, as you know, has produced very consistent returns overtime and the business also is capital light. So if we look at returns to shareholders from the wealth management business it's about 30% return on allocated capital.

On the right side of the slide you see the two brands which we're very proud of, the Merrill Lynch Wealth Management brand, which is headed by John as well as U.S Trust brand which is headed by our colleague Keith Banks. Between Keith, John and myself, the three of us as a team drive the wealth management sector forward. And importantly as you see on the slide, we are completely aligned with the overall operating principles, as Brian has said for the Bank of America as an enterprise.

So when you think about revenue, $17.8 billion of revenue we show you the characterization of how much of that is represented by the Merrill Lynch Wealth Management business as well as U.S. Trust and then if you move over to our net income before tax, you can also see that $4.5 billion. So you start to see the scale and the opportunity in the size of the business.

But more importantly if you move to the top right, what you see is that diversity of revenue expressed in the form of balances that are producing this recurring revenue. We got $820 billion of fee-based assets under management, we got a $245 billion deposit book and a $120 billion loan book. And then a large sum of that, that's over $1 trillion sitting in brokerage assets where we think there is opportunity to really drive fee-based asset management as an example.

And if you look at that in totality where does place us, we were number one in clients assets, we are number one in personal trust assets, we are number one in deposit balances, number one in lending balances, capital revenue as well as net income before tax and the margins at which you operate. So a lot of momentum in this business and a lot to build from. But obviously the market is important.

John Thiel

Absolutely and excited as we are about the position of the business today. Looking forward we're very excited about the opportunities that the market presents in wealth management in the U.S. Wealth management in the U.S addresses about a $40 trillion investable assets market and if you look at some of the underlying dynamics of that business it's going to be driving strong growth going forward.

Demographic trends, the retirement of the baby boomers perhaps first and foremost, second of all the wealth transfer and the dialogue that has to happen around wealth structuring and the state planning driven by that generational change. And then finally the way that opportunities in the wealth management markets are interacting with what's happening in the corporate and small business sector where we are seeing increasing private sales that are resulting in wealth management opportunities as well as companies of all sizes who are using the benefits platform much more strategically to win the war for talent.

And so we take these dynamics and then you look alongside them at lifestyle changes that are happening, the way the technology is impacting clients, changes in the tech landscape, all of these is producing a demand for advice. So together we think it's a very bullish case in terms of what the opportunities are in the wealth management arena.

Andy Sieg

So clearly the environments get opportunity, one of the first things we did over three years ago is really look at this very large business $2.4 trillion in client balances and really begin to dissect it. I like to use an old saying that to a hammer everything looks like a nail, and when we looked at our business four, five years ago, we are tailing it all towards that affluent client. And then not really looking at it on a segmented but we changed that three years ago.

So we really have a focus across these segments that you see. So on affluent segment, which we define is $250, 000 to a $1 million; high net-worth, a $1 million to $10 million; ultra-high net-worth 10 plus in institutional. What you see in the point of the slide that each have different growth characteristics and they are all big so the affluent space is $300 billion, the high net-worth space $800 billion, ultra-high net-worth 500 billion and the institutional 300 billion.

John Thiel

But what $2.5 million clients need, what a $25 million clients need and what $250 million retirement, defined contribution retirement plan are very different. So we've organized ourselves, Andy and I and Keith around these client segments and we are starting to see some of that work show off in that growth rates. If you look at like the institutional or the ultra-high net-worth, where the growth dynamics are really pretty staggering in and around how we have grown the balances in those business.

Our growth drivers in our strategy are simple and it's simple for reason, it's a big business, we've got a long history of serving clients and we wanted something that was repeatable and most importantly focused around clients. So our growth drivers are really simple. They are retained by our clients and our advisors, job one. With 14,000 advisors, $2.5 trillion in assets nothing I can do can have more of an impact than maintaining and growing those relationships and we can talk about what we're doing on that.

The second piece is then is around that what we call strengthening the relationship and this is pretty fundamental as you think about what wealth management is. There are a lot of people that still believe that wealth management is investment management that's one piece of wealth management. Wealth management is the investment management process, cash management lending and wealth structuring as clients began to pass wealth and all of those are opportunities, all those things are segments we serve and folks we serve as well.

And then the last is do the first two well it's really to take advantage of our leading position and grow and acquire more with strategy and the strategic initiatives that we develop. So I'd just talk about a couple. One is, what we are calling goals based wealth management, now it's the name that lot of people probably may not understand but fundamentally to me it's important as anything we're doing and really to say this plainly as possible, we've identified the fact that we have to change the dialogue with our clients.

So for so many years our value was placed on our ability to outperform the benchmark. And at the end of the day, that's not the way our clients think about their money, yes performance is important we take that it's a given but what we learned from 2000 to 2011 is that equities get some fee returning, 1.1% it's really tough to retire on 1.1% year for 11 straight years in a row. And so that we had to start talking about outcomes, because clients think their money has a job to do.

Andy Sieg

So we are reorienting our approach obviously still recognizing that performance is important, but now helping our clients identify what are their first priorities, their concerns, their goals and how can we track progress towards their success of retirement, the education of the kid, the second home and the like, which is fundamentally a very different conversation and one the clients are absolutely welcoming. And then obviously strengthen those relationships across banking and lending, make fee-based asset management core to the relationship, knowing that it would never be the only way to serve clients but clearly an important piece.

And so how that manifests itself, that diversification of revenue, the approach across wealth management you start to see here, because you can see the revenue and how it's growing and if you look at the fee-based assets under management the growth rate over the last several years, compare that to net interest income which is obviously the deposits and the loan and then our transactional balances which are growing but growing but slowly and that's very analogous across the industry.

So we know what the strategy and the implementation of the strategy, along with those simple growth drivers that we can continue to see this kind of results across our business, that's you saying okay competitively how does this stack up.

So let's just take deposits and loans and look at those. And it's interesting because many people want to suggest that this a new strategy for our organization, if any of you have followed Merrill Lynch as an example back several, many years ago the CMA account which Don Regan introduced in 1975 really was our attempt to really win the operating cash balances and begin to lend money to our clients.

What happened was in 2008 we came together with Bank of America and we've got a set of capabilities, we got a set of -- we were ubiquitous, we had deep experience in structured lending and we were able to take that client base of ours that we were doing pretty well with and really leverage the strengths of that organization and the great history that US Trust has had doing that. And you can see where we stack up to our competitors, with $245 billion of deposit balances, $125 billion of loans gives us a distinct advantage especially in the light of what some day should happen with rates.

The last thing maybe I'll talk about is this productivity advantage, because it's important, people will have written about the fact that hey isn't the [Wire House] industry losing advisors and are you losing share and the fact is that we've lost a slight amount of share to registered investment advisors. But if you look at what happened to the average productivity of our advisors, you see it moving up to where we near the lead and if you look at all our advisors and we're absolutely in the lead in experienced advisors.

The difference you see there is our development program, which we are unique in our industry we have over 3,000 advisors in our development program. Said another way it's our way to organically continue to build our sales force as our advisors age. But more importantly as the complexity of our clients grow across these many different sets of solution that we provide, we can put those advisors on to a team and they can distinctly cover specialty around the teams advisor clients base. So that's a clear advantage.

John Thiel

The great thing if you look at that so how is it done over time. In 2009 we had about 3,450 advisors who did a $1 million in revenue and we ended last year with over 5,160 advisors that did that. So you can see that productivity advantage and that manifests itself obviously in our work around our margins, and our [inaudible] because those fixed costs are fixed around those advisors.

And then the last thing real quickly we talked about a little bit about goals based wealth management. I would just mention that the other big investment that we had is in and around our teams and their productivity and supports what I just explained with this optimal practice that we've identified which is really our attempt to put function and process around key parts of our advisors' business. What are some of the parts business? You add up all of our advisors and that's what our business is.

So our goal is to help them run their businesses effectively, efficiently and as client focused as they need to be continue to capture the opportunity. So significant investment in that over $40 million a year to really invest in those advisors which is fundamental to retained strategy because the advisors know we are investing them in the business, their productivity is growing and obviously their income as well. Andy you address from here the platform.

Andy Sieg

That's great. Thank you. If we just focus for a minute where John led us which is talking about our platform, we see our platform capabilities as our real source of competitive advantage for us not just the breadth of capabilities but also work that we have done through programs such as goals wealth management that take our capabilities and better match them with the needs that our clients have shown to us. We have the capacity financially to be making investments across the cycle and many of our competitors have not and those are in areas of our traditional investment products as well as other aspects of the platform such as wealth structuring and our institutional retirement business.

And as John said Merrill Lynch's commitment to making the brokerage business and the banking business connect with each other goes back for the better part of four decades. If we look today of what Bank of America and the combination of the Merrill Lynch and Bank of America has meant in terms of bank brokerage integration it is truly striking. In any given month 48% of Merrill Lynch clients use the capabilities of Bank of America, either in the banking centers, ATMs, Bank of America Online, Bank of America mobile services.

We see our Merrill Lynch clients make 1.7 million banking transactions a month they drove 2 million ATM transactions a month, they deposit about $7 billion a month at the bank and so Don Reagan's vision about what CMA could mean in terms of brokerage integration the combination of Bank of America Merrill Lynch has made that a reality in our business.

If we then think about our core business that our clients know us for one of the most substantial investments that we are making is essentially an overhaul of our entire investment or set of investment advisory platforms. On the upper left side of this slide you see alphabet soup of acronyms. These are legacy investment advisors programs, they are separate account managed programs, the unified managed account program whose inception goes back I think to my senior year in colleges when the first of these programs is introduced.

We are as a firm spending about $100 million over several years to pull up this legacy program and replace them with new state-of-the-art integrated investment advisory program which we call Merrill Lynch 1.

At this point in time the platform has been build. It's been introduced to our financial advisors. It started with a pilot at the end of last summer. There are now about $2,600 financial advisors that are using the Merrill Lynch 1 platform, there is little over $9 billion of planned assets on the platform, the receptivity from our advisors and clients has been very, very high. You are going to continue to see the roll out of the Merrill Lynch 1 platform go through the Merrill Lynch system over the next six months and by the end of 2015, all of those legacy programs on the upper left of the slide will sunset and all of our investment advisory activity will be happening on Merrill Lynch 1.

Why is this important? We think that growth in fee-based assets that you see on the lower left will be able to accelerate from these levels given the strength of platform. And what we are also seeing and frankly I think both John and I are struck by it is how much efficiency our financial advisors and their support teams are picking up from the new platform. They are literally telling us that in some cases their client associates have a third of their day that they are able to then reinvest in client service to support the deepening and the strengthening the relationships as John talked about as well as spend more time around client acquisition. So there is a good deal of our strategy that's revolving around this introduction of Merrill Lynch 1.

When I mentioned earlier, that we are very much driving this business in a coordinated way with Brian's operating principle and the rest of the broader bank, one of the most vivid ways of this that this is coming to the fore is that the fact that we are pursuing growth opportunities which we think are very differentiated when we look at other wealth management firms, because we are leveraging the scale and the reach overall of Bank of America to drive the wealth management business.

Two areas where the results have been very, very strong. The first if we look at the Merrill Lynch legacy institutional retirement business and so this is where we are providing 401(k) plan services, equity comp plan services, we service defined benefit plans and some other benefit types for companies that business embodies capabilities which are relevant to essentially 100% of Bank of America's corporate clients ranging from the largest customers of the investment bank and the corporate bank down to small businesses.

Over the last two years, this activity working together between the Merrill Lynch retirement business and the bank has essentially tripled over the course of two years in terms of planned wins that we have. We won about 200 401(k) plans and other benefit plans with the commercial banks and the small business banks in 2012.

In 2013 that number rose to a little over 700, as you see here on the slide and we think that growth trajectory will continue. It's an example of bringing capabilities that we have to a much broader range of clients through the reach of the bank and we love the retirement business not just because it plays to the demographic trends that we talked about earlier and the delivery overtime in plan services and profitable in its own rights, it is also a feeder engine for our core wealth management relationships at Merrill Lynch and U.S Trust as individuals have needs outside of the plan or roll out overtime in plans and need individual brokerage accounts or investment advisory relationships.

At the bottom of the page we've summarize some work. But we are also beginning to leverage the reach that the 5,000 Bank of America consumer bank locations can have in terms of building our wealth management business. Over the course of the last couple of years we've began positioning what we ultimately be about 2,000 financial advisors that are either aligned to our mass affluent Merrill Edge or to John's business the core Merrill Lynch business who are working in banking center locations and are addressing wealth management needs of the eight million clients that come in and out of our banking centers overall in any given week.

We are very encouraged about what this is going to mean for future flows to the wealth management business, as you see last year this meant about $1 billion of additional flows of net new money, we see that number rising substantially from that level going forward and in addition this is providing a very meaningful and strategic training ground for future wealth management advisory talent. We think this is where many of the Merrill Lynch financial advisors and U.S Trust PCAs of the future will get their foot on the latter in of our business and become to get situated, become trained and also we move on to handle more complex client situations.

Let me just conclude at a couple of different points in the last 20 minutes or so. John and I have both talked about the strong profitability of our business and what this is enabling us to do in terms of ongoing investments in frontline talent as well as platforms to drive our business. If we look at 2013, the global wealth and investment management business overall posted a 26.4% pretax margin. We are proud of that number. It's just about 550 basis points ahead of our closest competitor. There also is in that number some non-cash items we're amortizing some expenses that came into the business as a result of Bank of America's acquisition in Merrill Lynch.

If we remove some of those non-cash items, we are actually posting an operating margin that's in excess of 30% today and we think that overtime a 30% margin is an achievable operating margin for this business when you take into account what the interest rate a more normalized interest rate environment as well. So we feel very good that we can balance profitability as well as ongoing investments in this business to take advantage of the growth opportunities that we see in the marketplace.

John Thiel

So I just end with where we begin right that we think as you heard the diversity of the revenue stream, the productivity of our advisors and the platform and the continued investment in the platform, the opportunity across the organization as well as the efficiency and obviously our focus on managing expenses diligently in our mind provides a very good story and a business that we're very excited about in this future. So Moshe…?

Earnings Call Part 2:

• Q&A with Bank of America Corporation CEO