Bank of New York Mellon

The Bank of New York Mellon (known as BNY Mellon) has deep roots in the origins of the modern day U.S. economy. It was initially started by Alexander Hamilton in 1784 during an economically devastated New York City, post-revolutionary war. Local merchants and lawyers had united to create a bank to help rebuild the economy. The bank’s name came about in the 1800s when a successful banker in Pittsburgh, Pennsylvania named Thomas Mellon and his sons Andrew and Richard founded a bank. This bank, T. Mellon and Sons, was launched in 1869. After Thomas Mellon’s retirement, his sons took over and the bank’s name changed to Mellon National Bank in 1902 upon joining the national banking system. In 1946, the Mellon National Bank merged with the Union Trust Company, making Mellon National Bank & Trust Company a leading provider in trust services. In 2007, Mellon Financial Corporation merged with The Bank of New York Company to form what is known today as BNY Mellon. To date, BNY Mellon is one of the longest-lasting financial institutions in the world specializing in wealth investment and management. They serve many of the world’s leading investors. The company is the largest deposit bank in the world, reported to have $1.7 trillion in managed assets and $28.5 trillion in assets under custody and/or administration.

The Good

  • Investment bank
  • Services and management
  • IRA benefits

Investment Bank

BNY Mellon is an investment bank, not a commercial bank. Its purpose is to manage and/or advise financial products for companies or individuals. It does not offer financial products such as personal checking and saving accounts, Certificate of Deposits (CDs).

Services and Management

The Bank's primary functions are managing and servicing the investments of institutions and high net-worth individuals. Its two primary businesses are Investment Services and Investment Management, which offer services for each stage of investment, from creation through to trading, holding, management, distribution and restructuring.

BNY Mellon's clients include:

  • 80 percent of Fortune 500 companies
  • 75 percent of the top 100 endowments
  • 66 percent of the top 1,000 pension funds
  • 50 percent of the top 200 life and health insurance companies
  • 50 percent of the top 50 universities

IRA Benefits

BNY Mellon does offer several investment benefits for Individual Retirement Accounts (IRAs).

Its mission is to help individuals, through their advisors, prepare for, and live comfortably in, retirement.

Investment benefits:

  • Convenient Account Services and distribution options for Traditional, Roth and Rollover IRA's, including
  • More than 20,000 load and no-load mutual funds from over 600 fund families
  • A full lineup of investment solutions, including:
    • Alternative investments
    • Domestic exchange-traded funds
    • FDIC-insured deposit and sweep vehicles
    • Individual securities
    • Managed investments
  • Opportunities for Advisors to Receive Faster Payment

BNY Mellon (through its subsidiary Pershing) offers advisors the potential to earn income fast through:

  • Automated processing for commission
  • 12b-1 payments for assets held on our platform
  • Monthly commission payments for advisors from select companies instead of quarterly payments
  • Flexible Distribution Options

The bank's Mutual Fund Only Option for IRAs carries a low-cost annual maintenance fee of only $10. The option is also available for small business client SEP (Simplified Employee Pension) and SIMPLE IRAs.

IRA Distribution Options include:

  • Corestone asset management account
  • IRA Resource Checking
  • Fed wires
  • Electronic funds transfer
  • Automated Required Minimum Distributions (RMDs)

At the account owner's request, the account owner's RMD amount will automatically be calculated on an annual basis. The account owner may establish a pre-set payment plan based on his or her needs.

  • Successor Beneficiaries for Stretch IRAs

Advisors are offered an additional opportunity to address their clients' estate planning needs. Investors are allowed to use the stretch distribution strategy to name successor beneficiaries, prompting clients to engage in broader conversations with their advisors.

  • Low-Cost Mutual Fund Only Option

The bank's Mutual Fund Only Option for IRAs carries a low-cost annual maintenance fee of only $10. The option is also available for small business client SEP (Simplified Employee Pension) and SIMPLE IRAs.

The Bad

  • Fine print
  • Alleged misconduct

Fine Print

BNY Mellon's biggest downfall seems to be a lack of full disclosure. The Bank has a lot of fine print accompanying the list of its financial and investment services. On the website, the disclosure links are in very small font (print) and can easily be missed. The disclosure information itself appears quite lengthy and complicated, unintended for advisors and clients to read and understand clearly.

Alleged Misconduct

This flaw became evident in March 2015, when the company admitted to facts concerning the misrepresentation of foreign exchange pricing and execution. BNY said it was providing the "best rates" and "best execution" on forex pegged to interbank rates, when the firm was actually giving its clients the worst reported price on those rates. Its alleged misconduct in this area includes:

  • Misrepresenting pricing as best rates to its clients
  • Providing clients with bad prices while retaining larger margins.
  • Letting go key executives

As a result, the company has incurred lawsuits that have resulted in large penalties, such as:

  • $335 million Civil Penalty to the United States and New York State
  • $335 million to resolve private class action lawsuits filed by the Bank's customers.
  • $14 million to its Employee Retirement Income Security Act plan customers
  • $70 million from other settlements, to resolve claims with the Department of Labor

The Bottom Line

The Bank of New York Mellon (BNY Mellon) is an investment bank with a global footprint started by Alexander Hamilton in the 1700s. The bank has been in business for over 200 years. It services many of the world's leading investors, including major publicly traded companies and high net-worth individuals.  It is the largest deposit bank in the world. As an investment bank, BNY Mellon does not offer commercial banking products, such as personal checking accounts. It does offer investment and wealth management services for financial products like Individual Retirement Accounts (IRAs). The Bank offers a variety of flexible and favorable IRA distribution options with a Fund-Only Mutual Fund option of only a $10 annual maintenance fee. BNY Mellon's low point has been its lack of disclosure to clients and both public and private entities regarding accurate foreign exchange price rates, resulting in financial losses and several lawsuits.

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  • User Score


    March 8th, 2017

    I submitted a request for return of excess contributions of $109.84. They proceeded to send me a check for $1098.84. When I called to get the error fixed, they were very unresponsive. I've called 3 times and each time the customer service rep and supervisor asks me to reiterate the issue (instead of reading the notes) and then tells me it is going to be longer (first 5-7 days, then 7-10 days, and most recently up to 30 days) to get the error that they made fixed. In the mean time, the funds that they erroneously took from my account are not available for me to use for medical expenses. They are rude and have never even apologized for the error. When I asked if my case would be given priority since they made a huge error, I was told absolutely not. I will be encouraging my husband's company to find a better provider for their employee's HSA accounts.

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    November 5th, 2016

    i got a check that i supposed won for 1787 dollars from this bank i went to cashed it and it came out that it was fake they almost call the cops on me.... it was a scam from a survey that i took... i dont understand how can people do that and how the bank is so easy for people to fake the checks

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