Merrill Deploys ‘Client Experience’ Teams to Retain Assets of Departing Brokers
Merrill Lynch has been stepping up its defense against brokers who jump to the competition with centralized teams of what the wirehouse labels “client experience specialists,” who call on customers as soon as their broker leaves.
The teams, which can include a manager and six to eight staffers, can spend up to 10 days on outreach and have access to client reviews and account data that can help them make a personalized presentation, according to a former Merrill market executive who said the teams are measured by asset retention.
“We’ve created a centralized group to serve as a resource for local leaders and advisors, further enhancing our approach to client retention,” the company said. “This group will drive consistent practices, including ensuring the firm contacts every client to discuss their complete financial needs and how their new advisor can help them pursue their goals.”
The plan is to expand the program, which is led by Adrienne Hughes, national client experience executive based in Chicago, to six teams–one for each of the firm’s geographic divisions–by September, according to the company and the sources.
A Merrill spokesman declined to comment on the firm’s customer retention rates since the teams were put in place, but a person familiar with the firm’s strategy said departing Merrill brokers on average leave behind about 40% of assets with the wirehouse. (The average broker sees 29% of assets stay with the departing firm, including 9% they intended to leave, according to an April study from Cerulli Associates.)
The retention push comes as Merrill in recent years has seen a steady stream of exits by large teams, and recruiters said it may reflect increasing concern among senior management about the level of departures and asset outflows.
“This is a SWAT team,” said Philip Waxelbaum, an industry recruiter based in Scottsdale, Arizona. “You don’t do something like this because your retention model is working.”
Merrill, which remains in the Protocol for Broker Recruiting despite exits by two of its largest competitors, last year gave managers authority to extend fee waivers for up to two years. It also this year shifted trainees to some roles exempt from the Protocol’s customer solicitation protections.
It has also brought at least two claims for temporary restraining orders against separate teams in Tennessee and Maryland. Merrill won a limited order blocking solicitation of bank clients in one Nashville, Tennessee case and agreed to dismiss another after the team returned iPads they had allegedly used to photograph customer data.
Two former managers said that the calls to customers could be used to bolster Merrill’s legal case by asking if customers knew of their broker’s plans ahead of time. That would constitute pre-solicitation and would be grounds for invalidating the Protocol protections, the former Merrill managers said.
The client experience specialist teams were deployed when a $260 million-AUM group led by producing manager William H. Wade, moved on June 24 from Merrill’s Brentwood, Tennessee office to Stifel Financial.
Wade, who had worked with Merrill and a Bank of America predecessor since 1996 and whose team generated around $1.9 million in annual revenue, said that the client experience specialists had not affected his ability to transfer customers. He had moved around 25% of his book of business in the two weeks since his departure, he said.
“The transition is going magnificently well,” Wade said, attributing transfers to Stifel’s transition team and “client loyalty.”