More ‘Edge’ Advisors Heading Into Merrill Wealth Branches
Bank of America’s experiment to put Merrill Edge advisors alongside brokers in full-service Merrill Lynch Wealth Management offices has been so successful that it is accelerating the program, an executive told AdvisorHub.About 300 Edge advisors were placed into Merrill branches this year to work with less affluent clients and facilitate referrals of clients with more sophisticated needs. The number should rise to about 2,000 within three to four years, said Aron Levine, head of consumer banking and investments at Bank of America.
“Those guys have been very effective so far,” Levine said of the Edge employees, who are categorized as Bank of America rather than Merrill advisors and who are paid by salary rather than on production-based grid payouts. “The fact that an FA can have someone right there as opposed to a phone call away in a center…makes a big difference in comfort level and working together.”
Merrill Lynch does not pay its wealth advisors on household accounts with less than $200,000 at the company, and has used incentives and pay deductions to encourage referring those accounts to Edge. Similarly, Edge’s “financial solutions advisors,” who are generally based in bank branches and call centers, receive incentives to refer affluent clients in the other direction.
Levine declined to provide specific referral figures. Merrill Lynch, however, said in an August presentation that FSAs had referred around 8,000 new accounts to Merrill wealth advisors while about 75% of Merrill Lynch’s more than 14,000 brokers have made referrals to the bank.
The cross-seeding of Edge advisors has raised some concerns among veteran brokers that Merrill is training a new generation of brokers who will be compensated more conservatively. A senior Merrill official has said that the efforts simply reflect a broader business policy of gathering investment assets from bank customers and of creating a more flexible in-house work environment.
Merrill, for example, is now encouraging candidates in its broker training programs who used to leave because of failing to meet expectations to consider jobs in other parts of the bank or in the back office, a senior Merrill executive said earlier this month after BofA reported third-quarter results.
At the same time, Edge is expected to become a larger pipeline for talent into Merrill Lynch Wealth’s full service business.
“It was too big of a jump to go from FSA to FA under the old model, but now we have more of a glidepath,” Levine said. “What you’ll start seeing in 2021 and 2022 is a hockey-stick rise in how many FSAs become Merrill FAs.”
Edge and Merrill Wealth have developed a joint training program for FSAs, he said. Merrill Lynch complex managers will work with local Bank of America market leaders to identify strong candidates to make the transition, he said.
Meantime, Merrill Edge’s FSA force of about 2,800 is expected to grow by 25%, or some 700, within three to four years, Levine said.
He also asserted that Bank of America does not intend to dilute the value of Merrill Wealth advisors, who distinguish themselves from FSAs with sophisticated planning programs appropriate to the estate, charitable and investment return needs and goals of their wealthy clients.
“The Merrill advisors offer such a broader range of services that we don’t offer,” Levine said. “They have to articulate it, but they are doing a really good job of making that distinction.”