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Top Wirehouse Read: Morgan Stanley FA Jumps to Merrill Lynch (Jan. 7)

By Murray Coleman December 30, 2016

When an LA-based team moved from one wirehouse to another, it became the most popular story among wirehouse readers.

Merrill Lynch’s hopes for a brokerage team it engaged last year seem to be paying off — fast and in spades. The Bank of America unit says Bruce Munster and his ex-Morgan Stanley teammates nearly doubled revenue from $5.2 million to $10 million and did it in just 10 months.

“That may be an industry record,” says headhunter Mark Elzweig. “Usually advisors see a drop in productivity in year one after a move.”

In February 2015, Merrill pulled Munster’s Los Angeles-based team — including advisors John Paffendorf and David Freeman — over from Morgan Stanley’s Family Wealth Group. The squad, which managed around $1.1 billion on its old perch, was said to be on the getting end of one of the biggest bonus packages awarded in a wirehouse-to-wirehouse move. The incentive “could equal about 400% of the group’s total yearly revenues,” Fox Business wrote soon after the jump, citing “industry executives with knowledge of the matter.”

But Munster says talk of his getting an outsized bonus was “perhaps the result of shoddy reporting.” He figures Merrill’s pitch to him was right in line with its offers to other high-end advice teams.

Wealth-industry consultant Michael Kitces pegs Merrill’s usual signing offer to experienced recruits from rival firms at 325% to 350% of the newcomer’s revenue in the previous 12 months, paid out in chunks over several years.

Bruce Munster

While Munster dismisses talk of getting a record-breaking bonus, he’s with Elzweig in viewing his team’s surge in sales last year as extraordinary.

The run-up came as Munster’s team brought over about 90% of its old book of business and added 12 new clients for a grand total of about $1.5 billion under management. The part of Merrill he works in, the firm’s Private Banking and Investment Group, caters to clients with at least $10 million to invest.

By itself, however, success with clients old and new doesn’t account for Munster’s recent surge in sales. The secret, says Munster, lies in the breadth and depth of Merrill’s service roster. Specifically, the advisor says his team “closed several very large lending mandates.”

As Munster tells it, his clients have responded to services on offer from other parts of Bank of America — from credit lines and escrow to trust and deposit services — that either weren’t available or weren’t easy to get at Morgan Stanley. “We’ve been fortunate to win nearly every mandate we put in for,” he says.

In fact, a Merrill spokesman says Munster’s team last year made “55 relevant referrals to other areas of Bank of America.”

Merrill compensates its FAs “on the entire client relationship and for referrals to other parts of the enterprise," the spokesman adds. This is something he says Morgan Stanley doesn’t do.

For Munster, this isn’t just cross selling. Rather, it’s a matter of meeting the requirements of clients with complex and multifaceted financial lives.

“We had the objective in view to move upmarket,” he says. “As you do that you need services that address both sides of clients’ balance sheets.”

Adds Munster: “This is why we left Morgan Stanley and came to Merrill Lynch versus going independent.”

Munster expects his team’s success to continue apace in 2016.

Morgan Stanley declined several requests for comment on Munster’s move to Merrill and his early-inning success there.

This article was the most popular story in 2016 for wirehouse readers and was originally published January 7. Read the original here.