Merrill Looks to Selectively Recruit Veteran Brokers: Exec
A senior Merrill Lynch executive on Thursday underscored that the firm plans to selectively hire veteran brokers in some key markets in the coming months, a sign headhunters read as a thaw in the brokerage’s three-year retrenchment from veteran broker recruiting.
The targeted markets include Silicon Valley, San Francisco, and Florida as well as six or eight other regional markets as priorities, according to the executive. Bank of America spokeswoman Julia Ehrenfeld declined to elaborate on targets or offers for prospective hires.
She also stressed that the selective hiring is a continuation and Merrill never stopped recruiting veterans entirely.
The executive’s remarks come as two of Merrill’s major competitors, UBS Wealth Management USA and Morgan Stanley Wealth Management, returned to the broker recruiting wars over the past year after implementing freezes of their own in 2016 and 2017, respectively, and as several large teams have left in recent months.
The comments appear to mark a “big change in strategy” for Merrill, which has shown little interest in experienced advisor teams, even ones with attractive client rosters, said industry recruiter Louis Diamond.
“Merrill has been getting bludgeoned,” said Diamond. “And in the last couple of years Merrill hasn’t been restocking the pond with experienced talent. It’s just been focused on trainees who aren’t bringing books.”
Bank of America reported on Thursday that headcount across its Global Wealth and Investment Management Division, which includes Merrill Lynch as well as Bank of America Private Bank and a cadre of Merrill Edge brokers, fell 3% year-over-year to 19,808.
Merrill’s competitive attrition rate in the first quarter was around 4%, roughly flat year-over-year, the executive said. The company since 2019 has combined headcount figures for its core Merrill salesforce with Merrill Edge consumer bank and this quarter included its private bankers as well, making it more difficult to delineate exactly where the biggest decreases in advisor numbers have occurred among BofA’s wealth businesses.
To be sure, the Merrill executive said the focus will remain on driving asset growth among its existing salesforce and home-grown talent from its Accelerated Growth Program and its community market hiring efforts in rural areas. The selective veteran broker hires will not be enough to “move the needle” for overall headcount, the senior executive said.
In 2020, Merrill hired 210 advisors through the AGP and community program and, in the first quarter, another 57, Ehrenfeld said. That’s in line with pre-pandemic recruiting of 221 in 2019 and comes despite a change to managers’ performance goals mid-year that excluded hiring from bonus calculations.
“We expect this hiring to accelerate as 2021 unfolds,” the Merrill spokeswoman said.
Late last year, Merrill had resumed hiring into its 43-month training program despite a pandemic-related slowdown, the executive said, but the pause also affected the GWIM unit’s advisor headcount number, he said.
Merrill plans to unveil revisions to the prospecting curriculum for trainees that largely do away with cold calling, he said, repeating a pledge the brokerage’s executives have previously made. In the next few days, Merrill will start rolling out a new platform for the trainees that allows them to use the LinkedIn portal for client development, the executive said
Merrill is also introducing this month new technology for fully virtual client onboarding—which will help trainees and veteran advisors open accounts within a day compared to the week-long timeframe when using paper documents, the executive said.
Internal asset growth efforts have continued to pay off as pandemic-related restrictions on client meets have relaxed. In the first three months of the year, brokers added 6,400 net new households, up 26% quarter-over-quarter and in line with pre-pandemic levels, the executive said.
The household and broker asset gathering efforts helped to boost flows for assets under management to $18 billion at the Global Wealth unit, up from $7.6 billion in the prior period.
Overall, Merrill reported revenue of $4.2 billion in the quarter, up 7% from $4.07 billion a year ago and its second-best quarter on record. The rise was driven by a record $2.5 billion in advisory revenue in the quarter as fee-based assets soared, the executive said.
Bank of America does not break out profitability for the Merrill unit, but net income for the full Global Wealth division, including the private bank, rose 2.3% to $881 million.
“We continue to deliver solid organic growth,” Bank of America CFO Paul Donofrio said in a vote of confidence on the unit’s performance on the company’s quarterly earnings call.
Over 80% of Merrill brokers are on track to have their best year ever on an annualized basis based on first quarter production, the anonymous Merrill executive said. That compares with 65% who had a record year last year.