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Bank of New York Mellon

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LAST UPDATED: June 11th, 2023

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.

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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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8 Reviews

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Jason Starvetsky Arvada, CO

I fell victim to an authorized push payment scam and reported it while the charges were still pending. I was told a fraud investigation was started immediately. I later found out it took them over 2 weeks to start the investigation. I think the only 'investigation' that occured was one to determine which technicality they would use to deny reimbursing me. Their debit spending limit is ridiculous, $10,000. What numbskull would keep that much in checking? My spending habits can not be more predictable yet 4 withdrawls in under 30 minutes totalling $4,000 did not trigger any fraud protection. Their letter of rejection was suppose to have instructions on how to appeal, it didn't so I emailed them for instructions. My email still has not been answered. This bank cares nothing for their customers. I would have been better off keeping my money under my mattress! Disregard the green 'amazing' box as I can not delete it.

1 year ago

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Patricia Lee Fort Myers, FL

I have the misfortune of being a Fidelity account client with a VISA administered by this bank. Today I attempted to get to the bottom of how and why its fraud department cancelled a critical construction job order without informing me. It took hours of getting bounced around by underpaid, poorly trained, pass the buck employees and an email to the CEO to be informed that 'while the fraud team tries to call every customer about a suspect transaction, we can't get to all the calls.' Our housing project can't proceed without this order, and we had no way of knowing it was cancelled until the delivery failed to arrive. We're now a month behind schedule. It's unlikely Fidelity will move its debit business to another bank because of one client, but if you haven't signed on the dotted line yet, stay away.

4 years ago

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Lisa Dallas, TX

This bank is under contract as seller and won't close the transaction. Put a foreclosure up for sale in January, my clients went under contract in July and was due to close in August. They are now homeless as their current home was sold in good faith that Bank of Melon would honor the contract and close timely. BOM still won't agree to pay what is owed in taxes on the property which they have known about for months. When told the situation, the asset manager said "too bad, let them terminate the contract if they aren't happy." Isn't that what you want to hear from a banker that holds your future in their hands? Disgusting!

6 years ago

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Jenny Bloch Reeves

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.

7 years ago

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Bea West Medford, MA

horrible! Steven C is unprofessional. He never responded to an urgent call for a week. He has a big title :Vice President at The Bank of New York Mellon The Bank of New York but absolutely useless. I even tried to contact his boss, Loretta L , no avail. They have no understanding of people 's stuation. Brought pain and anxiety to our lives by not being professional , responsible and responsive. We made attempts after attempts, thru phone calls and emails for days but they never responded . Shame on this bank to have such crappy employees who have no understanding of customers.

4 years ago

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Brian Padgett Newport Beach, CA

Fidelity Cash Management Account: The Servicer is BNY MELLON. Fidelity is a great company but BNY MELLON - BUYER BEWARE! I had my card stolen from my mailbox upon initial mailing, I have a POLICE REPORT and the two individuals are being prosecuted yet STILL BNY MELLON DENIED my fraud claim MULTIPLE TIMES. What other evidence would you require? I'm shocked and would HIGHLY ADVISE anyone and everyone to find a better card since there are so many out there. NOT WORTH YOUR TIME & ENERGY, Hope this helps. @BNYMELLON @Fidelity

4 years ago

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Andy Miami, FL

After dealing with BNY Mellon and my bank Wells Fargo for about a week, it appears there is a competition of some sort between both for the absolutely WORST customer service possible. Between getting passed around and receiving four numbers which three were disconnected and the one goes directly to VM. Meanwhile, it's our $ being wired from a customer which is being held. It appears these banks are getting so big to the point that they'll do whatever they want and whenever they feel like it with customer's money. ABSOLUTE WORST!!!!!!!

6 years ago

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Maleny Malagon

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

7 years ago