Merrill Lynch Has Big Plans to Catch Small Fry
Merrill Lynch seems to be going back on its stance of working only with wealthy clients, with plans to let brokers in certain locations work with investors with less than $100,000 in investable household assets, AdvisorHub writes.
For years, the wirehouse compensated advisors on accounts with a household net worth of more than $250,000, the industry website writes. Now Merrill Lynch plans to let brokers in regions with low market share and no branches of Bank of America, the wirehouse’s parent company, go after smaller fish as part of a new unit, sources tells AdvisorHub.
The wirehouse plans to roll out the new unit in three or four regions in the fourth quarter and then expand it to up to 150 branches that together have about 1,500 brokers, sources tell the website.
Under the plan, which is still awaiting final approval, Merrill Lynch would pay new recruits to the unit using a payout grid that ties their share of commissions and fees to their revenue production, a source tells the website. In addition, the wirehouse will pay the new hires a salary for three years, according to the source.
The move is part of an initiative by Merrill Lynch Wealth Management chief Andy Sieg to develop “community markets” among brokers 30 or more miles away from the wirehouse’s complex managers, the sources tell the website.
It also goes along with Bank of America CEO Brian Moynihan’s plan to grow the wealth business by attracting new clients while transitioning away from large signing bonuses for experienced producers, a source tells AdvisorHub.
For the planned new unit, Merrill Lynch would go after advisors with three to 10 years in the business, according to AdvisorHub’s sources. And by dropping the threshold from $250,000, the wirehouse hopes to lure brokers from competitors such as Edward Jones, Raymond James and RIAs who were scared off by the current high account minimum, the sources tell the website.
Merrill Lynch declined to comment on the story, writes AdvisorHub.