EXCLUSIVE: Merrill Lynch to Accelerate Release of 2018 Comp Plan
In case his force of almost 15,000 financial advisors failed to get the message, Merrill Lynch Wealth Management head Andy Sieg means business about their need to open more customer accounts.
The Bank of America retail brokerage unit will publish its 2018 compensation plan in early November, a month ahead of the usual date for the plan that is meant to model advisors’ sales behavior for the year ahead, according to several advisors and officials at the firm.
While Sieg did not spell out what will be in the plan or the reason for its early release in a conference call with the field last week, he is likely greasing the skids for getting them to improve a dismal number. The average Merrill broker has opened less than one net new household account over the past year, the company has told them.
The new compensation plan is likely to include a supplemental payout grid tied strictly to the new household metric, said a person who spoke to people briefed on the likely strategy. It will cut percentage points off the standard grid for brokers who have net household declines and add points as they hit growth targets, said a person who was briefed on the internal strategy.
“Our 2018 advisor comp plan is still in development,” Merrill spokeswoman Susan McCabe wrote in an e-mailed statement. She declined to comment on specifics.
The emphasis on account growth should come as no surprise given signals Sieg has been sending since taking the wealth management reins in January.
Invoking Bank of America CEO Brian Moynihan’s dictate to accelerate “responsible growth,” he has created a new sales region to service less affluent clients in remote geographic areas after years in which Merrill focused near exclusively on attracting more “wallet-share” from wealthy clients in high-end zip codes.
Last month, Merrill unveiled a short-term campaign that awards brokers who open more new accounts than their peers between August and the end of March with “recognition trips” at a warm-weather or winter ski resort.
“You have to be an absolute dummy not to understand what he wants,” said a multi-million-dollar producing broker who has been with Merrill for more than 30 years. “The compensation plan is meant to drive what we do. If they want me to gather more assets from my current clients, I gather. When they want to grow accounts at less than $250,000 that I used to stay away from, I’ll grow accounts.”