Skip to Main Content
SUBMIT A TIP RECEIVE DAILY NEWS
Menu AdvisorHub
  • News
      • Latest News
          • James Gorman, Chairman and CEO Morgan StanleyMorgan Stanley’s Gorman Tops Dimon as Best-Paid Big Bank CEO
          • Reading financial newsThis Week’s Top Stories: Morgan Stanley Boots Texas Broker, Merrill’s 2020 Growth Numbers and More
          • RIA DealsRIA Deal-making Hits Record Despite Pandemic
          • Advisor MoneyWells Fargo Recoups $2.5 Million from New Jersey Duo
        • Close
      • Advisor Moves
          • Boca Raton, FloridaRockefeller Lures Two Florida Teams with $9.8 Mln Revenue
          • Morgan Stanley, UBS Advisor movesMorgan Stanley Rehires $3.3-Mln UBS Team in North Carolina
          • Lars Olson of Sanctuary Wealth Partners in Marion, OHSanctuary Hires $435-Mln Merrill Team, Snowden Lures Another from Retirement
          • Stifel Investment CompanyStifel Hires 33-Year Brokerage Vet from Jefferies in Dallas
        • Close
      • Enforcement
          • Advisor MoneyWells Fargo Recoups $2.5 Million from New Jersey Duo
          • Businessman in prison, fraudWells Fargo Claws Back $3 Million from Jailed Ex-Broker
          • Finra signFinra Fines, Supends Ex-Ameriprise Broker Who Flipped ‘A’ Shares
          • Barred from the securities industry.SEC Puts Nail in Ex-Morgan Stanley Broker’s Career Coffin
        • Close
      • Markets
        • `Nothing Safer Than Cash’: Tech Rout Puts Silicon Valley on Edge
        • ‘Any News Is Bad News’ as Earnings Fail to Save Equity Bulls
        • ‘50 Cent’ Profited From Volatility Jump, Wells Fargo Says
        • ‘Beaten Down’ ETF Is a Way to Play Inverted Curve, BofA Says
        • Close
      • Opinion
          • Opinion-How-Will-The-Coronavirus-Affect-The-Stock-Market-Opinion: Coronavirus – What Advisors Need to Know
          • opinion-investors-conquered-fees-next-up-is-their-own-behaviorOpinion: Investors Conquered Fees but Not Their Own Behavior
          • Investor-Confidence-In-Stocks-Rightly-Declines-Opinion-772x485Investor Confidence in Stocks Rightly Declines: Opinion
          • Opinion-Schwabs-Zero-Commission-Decision-Challenges-Its-Ria-ClientsOpinion: Schwab’s Zero Commission Decision Challenges Its RIA Clients
        • Close
      • Fintech News
          • System outageMerrill Systems Hiccuped on Thursday as Stocks Slid
          • 7 dollar rolls‘The Rock’ Invests in Finance App Acorns, and New Users Get $7
          • TraderHigh-Frequency Traders Love Business With Robinhood
          • EtheriumJay Z, Charles Schwab-Backed Ethereum App Opens Doors to Public
        • Close
      • From the Publisher
          • 2021 PredictionsFrom the Publisher: Sirianni’s Predictions for 2021
          • Josh Rogers – 772×485Seven Questions with Tony Sirianni: Josh Rogers, Founder and CEO, Arete Wealth
          • Phil Hildebrandt — 772×485Seven Questions with Tony Sirianni: Phil Hildebrandt, Principal, CEO of Segall Bryant & Hamill
          • Christian Hyldahl, President of Varium Investment Partners-772×485An AdvisorHub Interview with Christian Hyldahl, President of Varium Investment Partners
          • John Peluso – 772×485Timely interview with John Peluso and AdvisorHub CEO Tony Sirianni
          • Louis Dworsky Coronacrash Interview-772×485Coronacrash Update: Hayden Royal’s Louis Dworsky & Tony Sirianni
          • Stratos_Jeff pic.jpg-772×485Coronacrash Update: Stratos Wealth Partners’ Jeff Concepcion & Tony Sirianni
          • coronacrash ben harrison – 772×485Coronacrash Update: BNY Mellon | Pershing’s Ben Harrison & Tony Sirianni
        • Close
    • Close
  • Deals & Comp
  • Recruiting Wire
  • Breakaway Center
  • Resources
    • resources-home-menuResources Home
    • PRACTICE MANAGEMENT RESOURCESPractice Management Resources
    • Transition ResourcesTransition Resources
    • Fintech ResourcesFintech Resources
    • menu fintechFintech Product Directory
    • Menu-Institute-772×485Institute
    • Boutique Wealth AdvisorsBoutique
    • EventsEvents
    • Asset Manager Hub
    • Close
  • AdvisorHub TV
  • Podcasts
  • RIA Center
  • Virtual Summit
close X
October 14, 2020

Merrill Wealth Slowly Eases Out of Covid Slump

by Jed Horowitz
|
Coronacrash, News
|
Bank of America, Merrill Lynch
|
Comments (13)
Share This
SUBMIT A TIP
Merrill Lynch Exterior Sign and Logo
wolterke | stock.adobe.com

Bank of America issued a mixed third-quarter report card for Merrill Lynch Wealth Management on Tuesday, saying revenue fell by 7.5% from the 2019 period but inched up 3% from the second quarter when advisors and clients were coping with the initial constraints of the Covid-19 crisis.

Financial advisors increased average annualized production in the July-September cycle to $1.12 million—up 3% from $1.07 million in the second quarter and $1.10 million in the third quarter of 2019—despite a drop in attracting new client assets. The average among “experienced advisors” currently stands at $1.46 million, also up 3%, the company said.

Net income at the bank’s Global Wealth & Investment Management division, which includes more than 14,000 Merrill Wealth advisors and about 1,900 BofA Private Bank advisors, fell 32% from the year-earlier quarter to $749 million. The profit was up 20% from the second-quarter doldrums.

Cratering net interest income in the division caused by rock-bottom rates more than offset higher asset management fees in the wealth division. BofA CEO Brian Moynihan said on an earnings call that the wealth division is furthering its goal of generating more bank loans and deposits, in addition to traditional investment revenue.

Referrals between Merrill brokers and bankers rose 17% in the first three quarters from the same 2019 period. Average deposits from market-wary wealth clients grew 15% from a year ago during the quarter, and average loans jumped 9% to $186 billion, the bank said.

The wealth businesses produced 22% of Bank of America’s total quarterly revenue of $20.5 billion—the second highest of its four business divisions, after consumer banking—and 15% of its $4.9 billion of net income, the smallest division contribution.

Merrill Wealth and the Private Bank ended the quarter with record-high client balances of $3.1 trillion, a 6% jump from the year-earlier third quarter on higher market valuations and client flows, but efforts to attract new client money to fee-based managed accounts lagged.

“Net client flows” across the division fell 61% to $1.39 billion from the second quarter and were 75% lower than the $5.52 billion advisors attracted in last year’s third quarter.

“There has been some slowing in household acquisition activity,” a senior Merrill executive told reporters on Tuesday, but indicated no plans to rescind the carrot-and-stick compensation plan introduced three years ago to incentivize advisors to grow their books.

The “growth grid” adds, deducts or maintains payout percentage points on broker revenue grids based on net new households and new assets. (Plans to raise the new household bogey to four accounts this year from three to avoid a penalty were canceled in June to accommodate lock-in challenges of the Covid crisis.)

The compensation scheme remains “remarkably strong,” with advisors averaging almost four times the new household results they were achieving before introduction of the growth grid, the executive said.

Merrill advisors attracted about 17,000 net new households in the first three quarters of 2020, compared with 28,000 in the comparable 2019 period, according to a spokesperson.

The Merrill executive credited Private Wealth Management advisors—about 200 broker teams generally servicing clients with $10 million or more of assets—with having had particular success in attracting assets during the Covid-19 crisis. Average per-account assets of Private Wealth clients are $33 million, said the executive, who spoke on condition of anonymity.

Bank of America no longer breaks out the distribution of advisors among its core Merrill Wealth, Private Wealth Management and Merrill Edge units, but the executive said that 75% of Merrill’s traditional brokers are producing more revenue this year than last and over 60% “are having the best years of their careers.”

Merrill Wealth President Andy Sieg has eschewed hiring experienced brokers from competitors to replace retiring or departing advisors for the last three years, and last month introduced a new development program to train wealth management brokers from within Bank of America.

Merrill’s expenses during the third quarter rose 3% from the year-earlier period to $3.5 billion on “higher revenue-related incentives” for advisors and spending on new digital projects such as a Personal Wealth Analysis tool that generated more than 150,000 financial plans during the third quarter, the company said.

Like this article? Let AdvisorHub come to you!  Sign up

Share This
Comments (13)
  • on Oct 14 2020, BIG PICTURE FACTS says:

    In the earnings press release Andy always likes to brag about having the most advisors in the top advisors lists for Barron’s, Forbes and other publications. He might also want to also show how many on those lists he INHERITED and how many HAVE LEFT since he took over. He would really a leader in those categories! Let’s see, attrition is low and the majority of FA’s are having their best year ever – but net income is down 32% from a year ago. Doesn’t quite add up, Andy!!!

    > Reply to BIG PICTURE FACTS
    • on Oct 14 2020, Phil says:

      there is one advisor on the top 10 at ML on the barrons list
      2020 Top 100 Financial Advisors
      The 17th edition of our annual Top 100 is based on quantitative and qualitative measures, including advisors’ assets and revenue, their regulatory records, and more.
      2020 Rank 2019 Rank Advisor Firm Location Retail (Up to $1 mil) High Net Worth ($1-10 mil) Ultrahigh Net Worth ($10 mil+) Foundations Endowments Institutional Team Assets ($mil) Typical Account ($mil) Typical Net Worth ($mil)
      1 1 Lyon Polk Morgan Stanley PWM New York • • 27,250 50 150
      2 2 Gregory Vaughan Morgan Stanley PWM Menlo Park, Calif. • • • • 24,765 75 150
      3 3 Andy Chase Morgan Stanley PWM Menlo Park, Calif. • • • • 45,968 10 30
      4 4 Mark T. Curtis Morgan Stanley Graystone Palo Alto • • • • • • 116,999 15 30
      5 5 Brian Pfeifler Morgan Stanley PWM New York • • • • 13,700 50 100
      6 11 Richard Saperstein Treasury Partners New York • • • 16,250 25 30
      7 6 Karen McDonald Morgan Stanley Wealth Management Palo Alto • • • • 78,963 3 10
      8 7 Jeff Erdmann Merrill Private Wealth Management Greenwich, Conn. • 9,713 40 60
      9 9 Mark Douglass Morgan Stanley PWM Menlo Park, Calif. • • • • 24,765 75 150
      10 14 Ron Basu Morgan Stanley PWM New York

      > Reply to Phil
    • on Oct 14 2020, 17,000 NEW HOUSEHOLDS! says:

      And don’t forget the 17,000 new households! Seems like a lot of work adding 17,000 households for a 32% decline in new profits!

      > Reply to 17,000 NEW HOUSEHOLDS!
      • on Oct 14 2020, Leo says:

        A client with 1mm dies and the money is divided between her 4 kids. ML counts it as 3 new plus 250k households. Glad to be out of the nonsense.

        > Reply to Leo
  • on Oct 14 2020, Phil says:

    “Bank of America no longer breaks out the distribution of advisors among its core Merrill Wealth, Private Wealth Management and Merrill Edge units”
    why would BofA want us to know what is going on. “The times are a changing”- I do miss the old days

    > Reply to Phil
  • on Oct 14 2020, Math Wins says:

    How can average per advisor production be up slightly and net income be down 32%….that doesn’t make any sense.

    Until you realize that $43,000,000,000 worth of teams have left Merrill so far this year. That’s a lot of inherited accounts to pass out. Even if those still at Merrill collect fees for a month or two until the ACAT comes in, they are going to have their best year and per advisor production increases.

    > Reply to Math Wins
    • on Dec 7 2020, Timm says:

      Because more newbies are teaming up more with senior advisors. Easy way to go from an average household of $250k to $3M in 1 day and distort the optics..

      > Reply to Timm
  • on Oct 14 2020, WhyIstayIdontknow says:

    Advisors at Merrill, those who have experience and have continue to stay at the company, continue to work to bring in new clients. However, MANAGEMENT continues to lose advisors which in turns loses clients. Based on advisor hub, Merrill is nearly double to losses of the next competitor. Based on averages, they are costing advisors 2 hh per year. I blame management for not creating an atmosphere for wanting to stay with the company. Because of management losses of advisors, the rest of the advisors are forced to try and and make up the difference.

    > Reply to WhyIstayIdontknow
    • on Oct 17 2020, Ken Lewis says:

      The asset loss is accelerating at the Bull. 2017 -$29b 2018 -$22b 2019 -$34b 2020 -$42b.

      > Reply to Ken Lewis
  • on Oct 15 2020, JTT says:

    Can’t wait for the new grid next year and the year after. Merrill is ready to spring their trap of salary + bonus soon.

    > Reply to JTT
    • on Oct 16 2020, Nogoingtosalary says:

      I am calling BS on this. It isn’t going to happen like that nor that soon. Experienced advisors will have grid and that will remain. The transition to salary is likely going to continue but over a 10 to 20 year period and only for new hires, like those coming from Edge or hired in a salary position to inherit clients. I see complaints all the time on here about salary when it will never impact those who are top quintile producers. I also see complaints that “young advisors” in the training program have no chance of making it – but that everywhere. The fact is young people coming into any business are less entrepreneurial, don’t like to take risk, would prefer the safety net of a salary and 9 to 5 job, and want clients given to them. The future of the business for those who can gather new assets will always reward those who are willing to go out and knock it out of the park on their own. RIA’s will continue to serve that type of advisor, particularly in the future, and that advisor will make more money – also taking on the risk of owning a business just like any business. On the flip side, the advisor that wants the security blanket of a big bank, salary and bonus will best be served never making as much as they could have, but never willing to work hard enough to achieve success on their own. Salary and bonus will serve the millennials well. That is what they want anyway. You can run a business with both advisory paid advisors and salary advisors at the same time.

      > Reply to Nogoingtosalary
      • on Oct 17 2020, Ken Lewis says:

        Experienced advisors are too fat and old to do anything to fix the sinking ship. It’s sad.

        > Reply to Ken Lewis
      • on Oct 18 2020, Former ML Lifer says:

        Disagree on salary and bonus in 10-20 years will happen much sooner along with Brian insisting that ml generate margins like UST

        From senior folks at Edge there are approximately 4000 financial solution advisors imbedded in the organization now. The median age of traditional advisors is in the low to mid 60’s and they are CTP eligible which places great restrictions on the younger advisor soliciting their clients if they leave in the future. Finally they are not hiring

        > Reply to Former ML Lifer

Leave a Reply Cancel reply

Tony Sirianni Podcast Banner

CORONACRASH NEWS

  • Merrill Touts Success of Growth Strategy in Pandemic-Afflicted Year

    Merrill Touts Success of Growth Strategy in Pandemic-Afflicted Year

    Jan 19, 2021
  • Raymond James Slashes CEO Pay 17% in Turbulent Year

    Raymond James Slashes CEO Pay 17% in Turbulent Year

    Jan 8, 2021
  • Solomon Sees Vaccine Bringing Goldman Staff Back by End of Year

    Solomon Sees Vaccine Bringing Goldman Staff Back by End of Year

    Jan 5, 2021
  • J.P. Morgan Bank Broker Cleared of Coronavirus Crash Claim

    J.P. Morgan Bank Broker Cleared of Coronavirus Crash Claim

    Dec 4, 2020
  • Edward Jones Broker Count Up 5%, Firm Pauses Branch Growth

    Edward Jones Broker Count Up 5%, Firm Pauses Branch Growth

    Nov 5, 2020

NEWS

  • Morgan Stanley’s Gorman Tops Dimon as Best-Paid Big Bank CEO

    Morgan Stanley’s Gorman Tops Dimon as Best-Paid Big Bank CEO

    Jan 23, 2021
  • This Week’s Top Stories: Morgan Stanley Boots Texas Broker, Merrill’s 2020 Growth Numbers and More

    This Week’s Top Stories: Morgan Stanley Boots Texas Broker, Merrill’s 2020 Growth Numbers and More

    Jan 23, 2021
  • RIA Deal-making Hits Record Despite Pandemic

    RIA Deal-making Hits Record Despite Pandemic

    Jan 22, 2021
  • Wells Fargo Recoups $2.5 Million from New Jersey Duo

    Wells Fargo Recoups $2.5 Million from New Jersey Duo

    Jan 22, 2021
  • Former Wells Client Associate Files Overtime Class-Action Suit

    Former Wells Client Associate Files Overtime Class-Action Suit

    Jan 22, 2021

FINANCIAL INDUSTRY PODCASTS

AllIndependenceSuccess
The must listen-to podcast for financial advisors by Tony Sirianni. Guests to include:
-Ron Kruszewski
-Shirl Penney
-Penny Pennington
-Eric Clarke
and many more
Michael Kitces and Carl Richards discuss financial advising topics.
Suzanne Siracuse asks the questions nobody else asks, as influencers and interviewer collide in her new and truly unique podcast series The Big Reveal.
The “new advice value stack,” and how firms can use it to help maximize their own value propositions for their clients.
The Brighthouse Financial Insights Panel is a group of leading, independent experts providing powerful insights into the big challenges facing you and your clients.
Equipping independent financial advisors with the tips, insights, and knowledge needed to evolve in every aspect of his or her life
Powering Independence Podcast, insights and ideas for RIAs, presented by Dynasty Financial Partners. A podcast dedicated to presenting fresh ideas and best practices for the wealth management industry.
As an industry expert, Frank LaRosa provides guidance and advice on a host of topics from recruiting and transitions, succession planning, practice management, M&A and more.
Our goal is to unlock the challenges to reveal the opportunities and what it means to provide advice in the 21st century.
Our webcast is dedicated to helping our viewers get real insights by avoiding the cognitive dissonance of today’s media outlets and biased editorial filters.
Go behind the scenes with registered investment advisors and other related independent business model experts
As a nationally recognized recruiter and consultant to financial advisors, Mindy Diamond has unmatched experience in introducing advisors to the independent space.
The must listen-to podcast for investors, venture capitalists and financial advisors, with Tony Sirianni and Paul Dietrich.
An Introduction to Independence: 5 Key Episodes to Jumpstart Your Knowledgebase
Jay is an investment strategist, CERTIFIED FINANCIAL PLANNER™ and business consultant to financial advisors.
In this podcast business owners, entrepreneurs and executives reveal their top tips for success.
We interview top financial advisors and visionary voices to bring you the strategies, tips, and tools you need to make a difference in people’s lives.
A financial literacy and commentary show that features a number of investors, financial experts, professional athletes, business owners and more.
Join Sound Financial Group CEO Paul Adams and President Cory Shepherd every week, as they help you Design and Build a Good Life™.
The Kuderna Podcast, focusing on wealth in it's original meaning- a state of well being.
Timeless wisdom, actionable information you can use right now to make smarter investment decisions.
Made for and dedicated to those folks serious about their financial plan.
Latest News 
Advisor Moves 
Enforcement 
Opinion 
  • About Us
  • Contact Us
  • Advertise
  • Events
  • Careers

 get our newsletter

Industry focused content and breaking news.

SIGN UP

Contact Us

EMAIL US
1707 Post Oak Blvd.
#484
Houston, TX 77056

© 2021 AdvisorHub
  • |Terms of Use
  • |Privacy Policy
  • |Advertise
  • |Careers
  • Facebook
  • Linkedin
  • Twitter

Back to top