A central asset account is a securities brokerage account with key banking features, designed to encourage brokerage clients to consolidate their financial assets at the brokerage firm that otherwise would be in separate banking accounts, probably at other financial institutions. In addition to trading securities, a central asset account allows the client to:
- Earn interest on cash balances
- Write checks
- Receive direct deposits
- Set up direct debits and automatic bill paying
- Withdraw cash from ATMs
- Have a linked credit card
The first central asset account was the Cash Management Account (CMA) launched by Merrill Lynch in 1978. Since Merrill Lynch both trademarked and patented the CMA, central asset accounts offered by other firms use different names, and slightly different internal processes. With the CMA, Merrill Lynch succeeded in getting a large number of clients to drop their relationships with banks, and thus began the blurring of banking and securities brokerage service.
