Welcome to Financial Advisor IQ

Two Merrill Lynch FAs Jump Ship Over Commission Ban

March 3, 2017

Two more veteran Merrill Lynch financial advisors have apparently gone to rival Morgan Stanley over the wirehouse’s decision to stop offering commission-based retirement accounts, anonymous sources tell AdvisorHub.

Michael Lombardi, who’s been with Merrill Lynch for 23 years and produced around $600,000 in revenue annually, and Andrew Katchen, a 17-year veteran of the brokerage who reportedly brought in $700,000 a year, left for Morgan Stanley earlier this week, a person familiar with their practices is said to have told the website.

Lombardi and Katchen’s unconfirmed departures were prompted by Merrill Lynch’s October decision to drop commission-based accounts to limit potential conflicts of interest among its brokers ahead of the Department of Labor’s fiduciary rule, three people who know the advisors are said to have told AdvisorHub. Lombardi in particular had a large number of clients in commission-based retirement accounts, a former colleague tells the website. He also took issue with the rising compliance requirements at Merrill Lynch, the anonymous source tells the website. Neither of the advisors responded to messages left at their offices by the website and a spokesman for Merrill Lynch declined comment to AdvisorHub.

In January Merrill Lynch advisors Ira Friedman and Andrew Sallis took off for Morgan Stanley, according to the website. Another six advisors had left the firm for First Republic Bank the same month, the site writes. All of these departures represented Merrill Lynch veterans, recruiter Howard Diamond tells the website.


Many other Merrill Lynch advisors have been frustrated by the wirehouse’s decision to drop commission-based retirement accounts, and one current broker has said that several advisors have lost clients as a result. Recruiters have long been saying the move will cause some advisors to leave Merrill Lynch, but the company added 129 net advisors last year.

The DOL’s fiduciary rule, which requires retirement brokers to put clients’ interests first and was scheduled to go into effect in April, is now being delayed by 60 days and faces the prospect of complete repeal. The delay follows a February 3 memorandum from President Donald Trump requiring a review of the rule’s effect on the financial services industry and retirement savers. Merrill Lynch, following Trump’s memorandum, has said it intends to go through with its current plans, as have several other large brokerages.

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