UPDATED: Merrill Trainees Digest Details of Revised Roles
(Updated with additional details, including the number of trainees who have signed offers.)
Bank of America’s Merrill Lynch wealth business has unveiled new job descriptions and titles for roughly 1,000 would-be brokers who will shift to new roles effective July 1 as part of a sweeping update last month to its advisor training program.
Some of the trainees were given the option to be Merrill Financial Solutions Advisors—a reference to the consumer bank-based FSA role held by salaried brokers who work with clients of the bank’s mass affluent Merrill Edge platform—for 18 months in a brokerage branch before they will be eligible to become a full-fledged Merrill broker.
Others, who were newer to the program, are being sent to bank branches to be FSAs for 18 months before they can graduate to the Merrill FSA phase.
A Merrill spokesman confirmed the details of the offers and said that 92% of trainees who received letters had signed them.
“Offer letter acceptance rate is exceeding expectations,” he said in an email.
As part of the letters, the trainees also agree to abide by one-year non-solicitation provisions and that they are not entitled to the legal protections afforded by the Protocol for Broker Recruiting, an industry pact which Merrill Lynch has signed and makes it easier for its advisors to take clients when they leave.
“In fact, unless you are working in the Merrill Financial Advisor role, Merrill Private Wealth Manager role, or Merrill Private Wealth Advisor role when your employment terminates, YOU ARE NOT eligible to follow the Protocol for Broker Recruiting,” the offer letter states (emphasis in original).
A trainee who is now a Merrill FSA said the new restrictions appeared more onerous than his previous agreements under the former program, known as the Financial Advisor Development Program. It also differs from Merrill’s most recent qualification to its Protocol joinder that was filed in 2015 and notes the Protocol applies to Merrill brokers, “including participants in the Practice Management Development [PMD] Program,” a reference to the earlier iteration of Merrill’s training program.
(Merrill, which halted veteran broker recruiting in 2017, has remained a signatory to the Broker Protocol despite exits that year by Morgan Stanley and UBS Wealth Management USA.)
A Merrill spokesperson declined to comment on the Protocol change specifically but noted that brokers at all levels had already been prohibited from soliciting customers sourced from Bank of America’s client base. Both bank-based and Merrill-based FSAs are expected to build their books from bank leads under the new program, a sign that consultants read as already making it difficult for the next generation of brokers to leave the firm.
The letters did not go to the other 2,000 trainees who were farther along in the 43-month legacy program and will continue in their new roles without having to re-sign employment agreements and can graduate to become an advisor in 12 to 18 months, a spokesperson confirmed.
The new details, however, rankled at least two trainees who said they were mulling either switching to other firms or striking out on their own by setting up a registered investment advisory firm.
“It seems they want us to be bankers more than brokers,” said the Merrill FSA who had been in the program for almost a year.
“It has been a mess of miscommunication and lack of communication,” said another FSA trainee, who will move to a bank branch. Despite having signed his own offer letter, he said that he had scheduled more than five job interviews this week, including with Fidelity Investments, Morgan Stanley, and Vanguard, out of frustration over lack of clarity for when he could become a full-time advisor.
Merrill’s training hit a speedbump in July last year when the wirehouse halted prospecting and performance goals after finding do-not-call violations by neophyte brokers–a development that sources said triggered a review by the Financial Industry Regulatory Authority. Merrill has since barred cold calling for all trainees and experienced brokers.
RIAs also appear to be fielding some inbound interest from Merrill trainees. Joe Birkofer, a senior executive at the fee-only RIA Legacy Asset Management, said he has received calls from two trainees.
“The training program has been radically revamped, and they’re really now being slotted for jobs at Bank of America and that’s not what they’ve signed up for,” said Birkofer, whose Houston-based firm manages $419 million in client assets.
A Fidelity spokesperson did not provide a comment by press time on any offers it has received. Spokespeople for Vanguard and Morgan Stanley did not return requests for comment.
In unveiling the program, Merrill President Andy Sieg said that the firm expects it could graduate around 1,000 new brokers per year at a roughly 80% success rate with the new FSA-based regime. Bank employees who joined the Merrill training program historically had higher success rates than other newcomers, executives have said.
The new candidates, who would look to capture some of the 3 million Bank of America customers with over $1 million in their bank accounts, would also be more diverse and culturally aligned with the company’s objectives than their predecessors.
“We’re uniquely positioned to identify future advisor talent while they’re still, in many cases, working in other lines of business, particularly within our consumer bank, in our Edge business, where they’re already licensed to do securities business and are advising clients and then have an aspiration, over time, to become advisors in the Private Bank or at Merrill,” Sieg said on June 14 at the online Morgan Stanley U.S. Financials, Payments & Commercial Real Estate Conference.