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Is there a Trend in Recent Merrill Lynch Moves?

August 9, 2016

The return, over several months, of three ex-Merrill Lynch brokers to the Bank of America-owned firm leads the Wall Street Journal to conclude that all wirehouses are the same.

It may be worth recalling, however, that there are more than 50,000 wirehouse FAs employed by four brokerages: Merrill, Morgan Stanley’s wealth-management unit, UBS Financial and Wells Fargo Advisors.

Morgan Stanley is the biggest wirehouse by headcount. Merrill is the biggest by money under management, and the second biggest by headcount.

The Journal is all excited about “boomerang” brokers like, it says, Oklahoma City-based Habib Yousefzadeh, who returned to Merrill from Morgan Stanley, where he’d been working since 2009. He was at Merrill for seven years before that.

The venerable newspaper’s other examples of boomerang brokers are Andrew Zimmerman, who left Merrill for Morgan Stanley in early 2008 and rejoined Merrill this past April (the Journal thinks it was in May), and John Campanello, who returned to Merrill from UBS, where he was employed from early 2009. Campanello’s first stint at Merrill was between late 2001 and January 2009. Before that, he was at Morgan Stanley for eight years.

The Journal acknowledges that wirehouse brokers hop between wirehouses for “lavish recruitment packages, which can reach multimillion-dollar levels for big producers.”

But the newspaper thinks the phenomenon of a few wirehouse advisors returning to a previous employer signals that “brokers view the big brokerages as being mostly similar.” After all, the publication reasons, they all feature “open-architecture investment platforms,” facilitate lending and offer insurance products.

As further proof of the sameness of the four wirehouses, the Journal provides a meandering quotation from advisor headhunter Mindy Diamond, complete with a confidence-killing ellipsis — a form of punctuation not normally countenanced at FA-IQ.

“Most advisors see all of the wirehouses as interchangeable and, in large part, they are,” Diamond tells the newspaper. “For sure there are differences between them, but at the end of the day, they are all big bureaucracies … So, if they are pretty much all the same, then if an advisor realizes that the firm he left wasn’t so bad after all, and he can get paid a transition package as incentive, why not do it?”

Never mind that a wirehouse advisor determined to spend a long career in that lucrative and prestigious channel has only three choices if he wants to switch shops.

And — to focus on two of the Journal’s three examples — never mind that worries about Merrill’s fate at the hands of Bank of America, its owner since 2009, may have subsided enough for some who left back then to return now (and grab another bonus on the way in).

No, obviously two brokers wandering back to the same gargantuan brokerage means all wirehouses are the same, just like the newspaper says.