You can’t make this stuff up. The number of surprises over the last few weeks just keeps coming. Who could have forecasted that Andy Sieg who pronounced himself to be a messiah of sorts for Merrill Lynch with all of his cost-cutting measures, grid cuts, hiring freezes, and culture changes which literally have driven many of Merrill’s top advisors out over the last few years has now abandoned even those remaining who believed in him. It is now crystal clear Sieg’s motivations regarding his true intentions, converting one of the most successful, entrepreneurial wealth management advisory models the world has even known, Merrill Lynch’s Thundering Herd, into a cookie cutter, salary bonus, mainstream private banking model. Merrill Lynch advisors have been fighting for years for their sovereignty against the BOA private banking model that Andy has been pushing with all his Tea Leaves messages. How ironic, Andy who claims he fought hard for the legacy Merrill Lynch advisor now heads to Citigroup, a pure salary/bonus private banking modeled firm leaving tracks of devastation in his wake.
You’d think with the departure of at least a guy commanding some attention and respect, even if his ways were unsavory at best, Merrill would think to put someone noteworthy in his place. One powerful advocate who commands an audience, representing the best interests of the legacy Merrill Lunch Thundering Herd is what advisors deserve.
Not so. Merrill, or should we say BOA leadership, has announced two underwhelming co-presidents, Lindsay Hans, who was just a divisional manager for 10 years, and Eric Schimpf, who is also only a divisional manager, been on and off again at the firm and lately only been there for 10 years. Two regional managers are chosen to lead this firm who have nowhere near the breadth of experience necessary to command such a monumental sales force. And as anyone knows, there is confusion in being led by two versus one consistent voice. Do these two even get along, have the experience and are they even prepared to take on such a massive role?
We asked Roger Gershman who specializes consulting top Merrill teams says, “advisors at Merrill have spent their life career with decades of loyalty, advised their hard earned clients into Merrill’s products and services, have managed their team’s growth, have built outstanding business’s, and to not have the respect of a CEO that represents their interests? Very disappointing.” Clearly this is by design for Bank of America as another stake in the ground that it is their firm, their ways, their model and their shareholders that matter most.
We’ve covered extensively the turmoil and mass exodus of advisors out of Merrill Lynch under Andy Sieg’s management. CEO of Bank of America, Brian Moynihan, power game seems to be over with full reign on the future of Mother Merrill. Gershman adds, “advisors are smart and its obvious the direction of BOA, I think we’ll see a free fall now at Merrill with an ever-greater push of cultural shifts and comp cuts.” For legacy advisor advisors the question becomes how much more can they rely upon their parent banks (big or small) to manage their affairs with overbearing costs, compliance and regulations and not to muck up what are thriving profitable advisory businesses.
Will the mass exodus continue? We think yes. The question is with banks faltering and affecting their wealth management divisions, where to run and how quickly can advisors pivot given the dramatic changes in such a short period of time? Clearly there is a tug of war between financial advisors and big bank’s shareholder interests. Merrill advisors beware- protect your team, your business, and your career.