Merrill Broker with $325 Mln German Book Jumps to Independent Firm
Another Merrill Lynch veteran who specializes in foreign accounts has left as the company tightens restrictions on the international business.
Michael Sauerborn on Thursday jumped to Steward Partners, an independent firm in New York City affiliated with Raymond James Financial. Sauerborn produced $1.325 million in the previous 12 months, Steward said in a statement, and around 90% of his clients are based in Germany.
Merrill abandoned servicing clients in Germany as part of a restructuring last summer of its international business. Focusing primarily on wealthy clients in Latin America and Canada, the Bank of America-owned broker-dealer doubled the minimum account size on non-U.S accounts in some countries to $5 million.
It also reduced its farflung retail network to 29 countries and is considering segregating qualified advisors into a separate business unit, similarly to those in its Private Banking and Investment Group who work with very wealthy domestic clients.
“It’s a high net-worth play and we understand it’s not for everybody,” said a person familiar with Merrill’s plans, who spoke on condition of anonymity. She asserted that Merrill is actively recruiting qualified brokers serving foreign clients.
The restrictions that Merrill and other big firms have been imposing comes as regulators are tightening oversight of anti-money-laundering and Foreign Corrupt Practices Act rules.
Some Merrill brokers have not taken the changes passively. Three filed a federal class-action lawsuit in Miami earlier this month alleging that Merrill misled them about its commitment to their international clients. The plaintiffs, one of whom set up as a registered investment advisor to serve Latin American clients last week, seek approval to sue on behalf of more than 100 current and former brokers.
When Merrill announced its reorganization of the international client business last summer, it gave brokers 18 months to either bring account balances up to new minimal levels or close the accounts.
In an interview on Monday, Sauerborn said he was not aware of the lawsuit but has been uncomfortable with Merrill’s commitment to certain markets since it sold most of its offshore retail brokerage business to Julius Baer in 2012. It was at that time that Merrill reassured its U.S.-based international brokers that it would support them, according to the lawsuit.
“I saw the writing on the wall,” said Sauerborn, who joined Merrill in 1999 from Dresdner Kleinwort Benson North America.