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Ex-Merrill FAs Sue Over Cuts in Non-U.S. Business

November 29, 2016

Former Merrill Lynch brokers are suing the firm over changes in its international business they say “devastated” their own businesses, the Wall Street Journal reports.

An amended complaint filed last week on behalf of three former advisors accuses the bank of misleading its brokers and new recruits about its commitment to international clients, according to the paper. Merrill’s 2015 revamp of how it handles non-U.S. wealth management clients, which included new limits placed on brokers traveling abroad and a reduction in the number of countries where brokers could recruit customers, “significantly hindered” those brokers based in the U.S. who are focused on foreign clients, according to the suit.

A lawyer representing the former brokers tells the Journal some advisors lost more than half of their clients as a result of the changes. He also says the company failed to tell potential new hires about the planned changes. The suit is seeking class-action status. A Merrill representative tells the Journal that it will continue to fight the suit.


Merrill’s changes to how it serves clients based outside the U.S. have pushed dozens of brokers to leave the firm, according to the Journal. Elizabeth van Walleghem, who led an advisor team managing $550 million in client assets at the wirehouse, broke away to help form MAXIMAI Investment Partners. She told FA-IQ last month that the main reason for the move was that Merrill Lynch made it increasingly difficult for her team to work with long-established international clients.

Other brokerage firms have made moves similar to Merrill Lynch’s in how they handle international clients. Last summer, Morgan Stanley raised minimum benchmarks on non-U.S. customers and restricted their operations to 60 countries. And in 2014, RBC closed its wealth management business in Latin America.

By Alex Padalka
  • To read the Wall Street Journal article cited in this story, click here.