Merrill Growth, Part II: New Award Trips for Short-Term Productivity
Merrill Lynch’s continuing efforts to squeeze more production out of its almost 15,000 brokers has prompted it to launch the second round of a program that offers reward trips to those who generate the most new business over an eight-month period.
In an email sent to brokers on Monday, Merrill Wealth head Andrew Sieg said he is “delighted” to relaunch the “Excellence in Growth” program that measures brokers and trainees with a formula that incorporates “new client acquisition” and “net new asset and liability growth” between July 1 and the end of February.
The first program was launched last year by Sieg in an effort to motivate brokers at a time when Merrill had curtailed the hiring of veteran brokers, the traditional source of new growth at large firms. The average Merrill broker was opening less than one net new household account a year, Sieg and other executives had said in 2017.
The new program will offer branch-based brokers, trainees, bank-based brokers and “team financial advisors” who prevail over peers of similar experience levels a choice of a summer or fall 2019 trip with a guest. The trips are to three-day “educational symposiums” being held at Fairmont Hotels in Quebec City and in San Francisco. Sieg’s memo called the venues “exciting new destinations.”
Merrill, like other firms that have long offered “recognition club” trips to top producers, carefully positions the trips as educational to avoid regulatory prohibitions against holding sales contests.
The relaunch of the program signals that Sieg and his Bank of America bosses judged last year’s program a success. In announcing 400 winners of the short-term growth initiative that ran from last August through this March, Merrill said the winners brought in an average of 9.5 new household accounts during the period.
Both the new and initial program track asset growth from current clients and success in selling loans and other Bank of America credit products, as well as generation of new household accounts. Sieg’s memo cites the program as an opportunity for brokers to be recognized for “responsible growth,” a mantra frequently used by BofA chairman Brian Moynihan.
The special growth award continues a range of initiatives that Sieg has introduced as Merrill broadly continues its freeze on hiring experienced brokers. Merrill’s 2018 compensation plan subjects brokers to a carrot-and-stick mix of bonuses and payout cuts related to growing their books of business. Sieg’s lieutenants also have created an Advisor Growth National Committee of senior producers to guide and cheerlead the initiatives.
“We have been trying to demonstrate with a variety of methods and techniques, whether it’s tech, training, or compensation programs, that we are aligned toward helping the advisor grow…without increasing overall expenses,” said Bank of America spokesman Jerome Dubrowski.
The bank’s chief financial officer in April flaunted Merrill’s growth data, saying “organic household acquisition” for the first quarter was the highest in five years and total net new money collected by brokers in the first quarter was the highest since the bank’s acquisition of the firm in January 2009.
Many of the top “qualifiers” in the first Excellence in Growth program were established brokers who ranked in “top” advisor lists. As in the first initiative, advisors in the new one will compete against colleagues within the same length-of-service ranges, according to the memo.
A Merrill spokeswoman declined to comment on whether round two of the growth award programs will include separate competition categories for brokers at its “private bank and investment group” (PBIG), who generally work with very wealthy investors.