Dividends: Battle over the CMA Clones

In the beginning was the Merrill Lynch Cash Management Account (CMA). Started in 1977, the CMA is an all-purpose account that combines traditional banking services with brokerage ones and pays high money-market rates. The CMA is widely regarded as one of the most innovative consumer financial products in the past decade and now has 1 million customers. Merrill Lynch was so proud of the CMA that it patented the account and began demanding a $10 annual licensing fee for each similar account that competitors opened.

Rival financiers originally laughed at the proposal, but last week they stopped abruptly. Dean Witter Reynolds...

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