Merrill Private Hires $15-Million BNY Mellon Team
(Updates story in 12th paragraph with comment from a BNY Mellon spokesman, and adds details throughout.)
Merrill Lynch may have stopped recruiting experienced brokers directly from competitors, but it wrote a check this week to attract a $15-million team of private bankers from BNY Mellon Wealth Management in southern California.
The bankers are moving from the traditional salary-plus-bonus compensation structure of private banks to the potentially more lucrative “eat-what-you-kill” incremental grid structure of traditional brokers. It ties the percentage of revenue advisors retain to their annual level of production, usually topping off at around 50%.
Merrill gave the four advisors forgivable-loan cash signing bonuses equal to about 100% of their production in the previous 12 months, said a person who claimed familiarity with the deal, though another source said the recruiting bonus was atypically customized to reward certain team, rather than individual, goals.
While competitors such as Wells Fargo Advisors have been offering signing bonuses that can top 200% of the annual revenue generated by a successful broker, the hiring of the BNY Mellon team represents a significant commitment for Bank of America-owned Merrill following years of retrenchment from the recruiting market, according to headhunters.
Merrill’s bet is that the team’s customers will be more loyal to the advisors than to the bank they worked for, they said. Assets of private banking client are generally less mobile than those of brokerage clients, in part because of lending and other banking arrangements that tie wealthy clients to the institutions.
Sierzant declined to discuss compensation, but said the team moved after about a year of due diligence that included reviews of about a dozen wirehouses and independent advisory firms before narrowing the choice to four finalists.
“The focus of our entire search was on wanting to improve the experience of our clients and customers, and provide more resources than they get from traditional bank providers,” he said, mentioning technology that promotes faster account opening and broader product platforms, among other amenities that he said Merrill offers.
He declined to identify the runner-up firms, but said the team knew some advisors at the Merrill office and were impressed with Jeffrey Wood, regional director in southern California for Merrill’s private wealth group.
Neither Wood nor spokespeople for Merrill Lynch returned requests for comment.
Sierzant said that the team intends to continue offering only fee-based advisory accounts at Merrill, but a BNY Mellon spokesman positioned the advisors’ move as one driven by their yen for a product-driven culture.
“While these employees are leaving to join a commission-based model, we believe BNY Mellon Wealth Management’s fiduciary model offers the best investment guidance to help clients reach their financial goals,” the spokesman said. “We are confident that clients recognize that our fiduciary model does not compensate us on the products we sell, but on our expertise and ability to serve our clients well.”
The new Merrill advisors, who are not yet registered with Finra or the SEC, took a 60-day garden leave from BNY Mellon on the advice of their lawyers, said one source, despite California courts’ reputation for giving wide latitude to employee mobility.
Sierzant declined to comment on the legal intricacies of the move, but a person close to the team said that BNY Mellon Wealth Management, which is not in the Protocol for Broker Recruiting, was “very upset” by their decision. “They were caught napping in how they treat high performers,” the person said.
Separately, Morgan Stanley confirmed that it hired two bankers who worked at HSBC Private Banking in Beverly Hills. Peter Rosenberg and Andrew Bunnin joined the wirehouse’s branch in Woodland Hills, Calif., two weeks ago, according to their BrokerCheck records.
Rosenberg, a registered rep for 26 years at Prudential Securities, Bear Stearns and City National, among other banks and brokers, joined HSBC in April 2015. “My role is to lead HSBC’s Wealth Management businesses in the West,” his LinkedIn profile said. Rosenberg does not have a management role at Morgan Stanley, a company spokeswoman said.
Bunnin began his 14-year career as a registered rep with Sanford C. Bernstein. He also worked at Wells Fargo Advisors and First Republic before arriving at HSBC in September 2016, according to his BrokerCheck history.
Rosenberg declined to discuss the team’s reasons for moving.