Merrill’s Sieg Sees Big Increase in New Household Accounts
Merrill Lynch Wealth Management President Andy Sieg told managers this week he is confident brokers will be able to open eight new accounts annually once work conditions and client confidence return to a degree of normalcy.
It’s a multi-year goal, said one person familiar with the plan, but would be a significant advance over just three years ago when the average Merrill broker was opening less than one net new account annually.
Sieg made his comments to senior market managers during a three-day virtual sales meeting, and did not assert that the eight new household accounts would be part of Merrill’s 2021 compensation plan, said two sources at the firm. The productivity talk was “aspirational,” and made in the context of other goals such as improving racial and gender diversity and growing assets organically (another element of the growth grid).
Any discussion of raising performance goals would be inappropriate during the pandemic, said some sources. Merrill last month acknowledged the challenges of prospecting during the pandemic by lowering to three from four the number of new households that brokers must add this year to avoid a 100 basis-point deduction in their production-based payouts.
But some recruiters, competitors and Merrill advisors said Sieg’s mention of the eight-household aspiration could be a signal of raised bars once relatively normal conditions return.
“The writing is on the wall,” said Casey Knight, a Houston-based recruiter who works primarily for independent broker-dealers.
Merrill also offers incentives to advisors for cross-selling Bank of America products, getting clients to use more digital services. And for the past two years, it has not paid brokers on the first 3% of monthly revenue they produce.
Sieg’s comments this week alluded to the increased service capabilities Merrill’s brokers will enjoy from a new “client engagement workstation.” Merrill is also expanding education and training for its client associates to allow them to handle more advanced tasks and potentially prepare them to become advisors.
Merrill’s approximately 14,000 brokers last year attracted almost 41,000 new households in 2019, up 25% from 2018, officials said earlier this year, and about 70% qualified for growth-grid increases or remained payout-neutral.
The number has slowed during the pandemic. Brokers last quarter opened a total of 6,000 net new accounts, down from 10,200 in the second quarter of 2019.