Building Trust Through A Consistent Client ExperienceRobert J. McCannVice Chairman, Wealth ManagementMerrill Lynch & Co., Inc.

Tower Group 200410th Annual Financial ServicesBusiness & Technology ConferenceMay 21, 2004Boston, MA

Industry Returns to ProfitabilityNet Revenues (Index)

Composite

50

75

100

125

150

175

3/01 6/01 9/01 12/01 3/02 6/02 9/02 12/02 3/03 6/03 9/03 12/03 3/04

Inde

x (1

Q01

= 1

00)

Pre-Tax Earnings (Index)

Composite

50

75

100

125

150

175

3/01 6/01 9/01 12/01 3/02 6/02 9/02 12/02 3/03 6/03 9/03 12/03 3/04

Inde

x (1

Q01

= 1

00)

Source: Merrill Lynch Investor Relations: Composite includes BSC, C, GS, JPM, LEH, MER and MWD

Trust Takes a Hit

Source: SIA 2003 Investor Survey

7%9% 8%

41%43%

0%

10%

20%

30%

40%

50%

1999 2000 2001 2002 2003

Investors citing dishonesty as main issue facing securities industry

The ‘Tech Bubble’ Bursts

March 2000 Peak

October 2002 TroughSource: Merrill Lynch Economics

$8 trillion in value destruction

High Profile Scandals

Accounting scandals

Celebrity prosecutions

Research independence

Mutual funds

How to Restore Trust?

Market recovery

Honest accounting

Level playing field

Objective advice that’s suitable

Holistic approach to client needs

The Client Relationship:What do they Want?

Keeps my best interests at heart

Returns my calls promptly

A strong performance track record

Keeps me regularly informed about

performance

Helps me develop overall investment strategy and asset

allocation

64%61% 56%

48% 45%

Source: SIA 2003 Investor Survey

We Have the “Total” at Merrill Lynch

Retirement

Credit & Lending

Investments

Tracking Progress

Business Financial Services

Estate Planning Services

Beyond Banking

Advice & Planning

WE SEE YOUR FINANCIAL LIFE IN TOTALSM

The Wealth Management Process

Set Strategy

Implement Solutions

ReviewProgress

Establish Objectives

Assessing Your Goals

Allocating Your Assets

Investment Proposal

Client Review Center

Top Five Mistakes Brokers Make

Allowing even a whiff of day trading

Not updating paperwork

Not taking notes

Forgetting the heirs

Embracing the unsophisticated, greedy client

Analyzing the Analysts

The threshold question:

Does Merrill Lynch research add value?

A Decade of Research Out-Performance

1993-2002Average quarterly return of research recommendations:

Merrill Lynch 3.07%

CSFB 2.41%

Morgan Stanley 1.86%

Goldman Sachs 1.93%

Salomon Smith Barney 1.11%

Lehman Brothers 1.00%

S&P 500 2.26%

Source: Study by J. Randall WoolridgeThe Journal of Investing, Spring 2004

A New Research Paradigm

Team culture vs. star culture

Absolute vs. relative ratings

More selective sector coverage

Cross-discipline, thematic reports

A New Research Paradigm

Reports from Morningstar, BNY Jaywalk

“Buy, Hold, Sell” recommendations

Client access via website, toll-free numbers

Recommendations on statements, confirms

“Independent” research

Building Trust Through A Consistent Client ExperienceRobert J. McCannVice Chairman, Wealth ManagementMerrill Lynch & Co., Inc.

Tower Group 200410th Annual Financial ServicesBusiness & Technology ConferenceMay 21, 2004Boston, MA