ML Fired Arrested Advisor in Connecticut

James Iannazzo was arrested for hurling a drink at a smoothie shop employee in an expletive-laced rant captured on a TikTok video (watch below).

On a TikTok video taken in a Robeks store in Fairfield on Saturday, James Iannazzo, 48, yelled, “F—-ing stupid, f—-ing ignorant high school kids.”

Iannazzo, a Merrill Lynch employee since 1995, was enraged that day after his nut-allergic son went into life-threatening anaphylactic shock after drinking a drink from the store, resulting in the 17-year-old hospitalization.

The video shows Iannazzo standing at the store’s counter, demanding to know who made his son’s drink. It also shows him refusing to leave when workers said they didn’t know, and after they repeatedly requested him to leave due to his behavior.

He exclaimed, “I want to speak to the f—-ing person who made this drink!”

Iannazzo was charged with “intimidation based on bigotry or bias in the second degree, second-degree breach of peace, and first-degree criminal trespass” after turning himself in on Saturday. On February 7, he is scheduled to appear in Bridgeport Superior Court.

“He deeply regrets his actions and acted completely out of character,” Iannazzo’s lawyer Frank Riccio said in a statement.

Merrill Lynch fired Iannazzo on Sunday after learning of the TikTok video, which has over 2.6 million views since being shared on Twitter.

“This type of behavior is not tolerated by our company,” Merrill Lynch spokesman Bill Halldin said.

“We investigated right away and took action.” “This individual is no longer employed at our firm,” Haldin said, referring to Bank of America’s investment and wealth management division.

$2M J.P. Morgan Advisor Heads to WF and Yet Another to RayJay

Wells Fargo Advisors hired a $2 million producer from J.P. Morgan Advisors in Los Angeles on Friday.

Steven Tann began his career in 1987 with J.P. Morgan Advisors’ predecessor, Bear Stearns, but resigned two years later to pursue a 17-year career in television and film production.

Roger Gershman, an industry recruiter said “The Wells Fargo Private Wealth initiative is really resonating with advisors. Especially when combined with the talents of Paul Vannuki.” The complex manager brought on another PWM team last year, David Romans and Teresa Fisher from JPMS. The dynamic duo generated $4M+ in revenue. “The deals WF is offering are unprecedented. It really is a great combination of a new PWM platform, support, and deal ” says Gershman. Phil Sieg, who took over as CEO of J.P. Morgan Advisors in April last year has stated that he aims to quadruple the present headcount of roughly 450 brokers yet every month there is greater attrition than additions.

Wells Fargo has also been aggressively recruiting with top-tier packages and local managers who do not recruit face significant penalties this year. The rate of attrition shows a large improvement. Across the country in Coral Gables, Michael R. Revilla and Manuel A. Bernárdez joined the J.P. Morgan traditional brokerage firm in Coral Gables, Miami, last Tuesday. According to Forbes, who rated Revilla #428 on its list of the top next-generation advisors in 2021, they managed roughly $285 million in customer assets.

An unnamed source at JPMS said “the systems and ops an atrocity. We feel like the adopted step-child of JPM Private Bank. All the offices across the country have similar concerns. ” Gershman confirms whereas JPM has a terrific name and reputation, clients have no idea how much the advisors struggle under the old the legacy Bear Sterns division and are at their whit’s end with back-office administration and compliance oversight.

Revilla joined Raymond James’ predecessor Morgan Keegan & Co. in 2005. According to his former website, he also served as an associate market director for Raymond James’ Miami-Dade complex in 2018. According to the FINRA BrokerCheck database, Bernárdez began his career with Raymond James in 2014.

J.P. Morgan Advisors, which has been led by former Merrill private wealth executive Phil Sieg since April last year, has implemented a number of policy and compensation changes in order to address common broker complaints though that has apparently not stemmed the tide. The division, which is a modest part of J.P. Morgan’s $700 billion-asset-under-management Wealth Management division and dwarfed by its private bank, has mostly targeted major wirehouse producers but the competition for talent has become more fierce to retain and lower attrition.


The Thundering Herd continues its exodus out the door with one of the most high-profile teams in the nation. As the very first landmark departures in the 1st week of 2022, The Hirsch Stabile Group overseeing over $1.75BB in client balances and $8.2M in revenue suggests there is much more to come out of Merrill.

Adam Hirsch and Stephen Stabile were not only highly recognized as one of the youngest fastest-growing “Under 40” teams (see below) but also recognized in Forbes Best-In-State Wealth Advisors 2021 list for the 3rd consecutive year (Forbes “Best-in-State Wealth Advisors” February 2019, January 2020, February 2021). In addition, Stephen Stabile joined Merrill Lynch Wealth management in 2004 and was a member of and keynote speaker for the Merrill Lynch Optimal Practice Management Faculty where he provided training for the firm’s advisors nationally. He also was on a select committee of key teams nationally that actively engaged with Andy Seig regarding strategy to re-build culture, retain talent, and further the interests of advisors practices.

Roger Gershman CEO of The Gershman Group was instrumental in their search for a culture that matched the team’s desire to be part of a boutique firm with a more sophisticated approach to wealth management, opportunity to grow, and the end client user experience to be much more high touch. Gershman says, “First Republic Bank is a world-class bank whose reputation is nothing less than outstanding among its commercial lending clients allowing advisors to be fed significant referrals for growth.” Not only is its platform robust rivaling most any wirehouse, but the service is also demonstrably better. The economic deal packages happen to be more than icing on the cake. Gershman says, “the deal packages offered to the ‘right team’ does not compare to most anything offered in our industry.”

Also, Adam Hirsch who joined Merrill Lynch Wealth Management in 2006 has earned multiple recognition awards including:
*Financial Planning’s “Top 40 Advisors Under 40” List January 2021.
*On Wall Street –“Top 40 Under 40″ January 2020.
*Forbes “Top Next-Generation Wealth Advisors” July 2019 and July 2020.
*Forbes “Best-in-State Next-Generation Wealth Advisors” in September 2019.

The move displays how deep the level of frustration with Merrill/ Bank of America’s direction and the changing culture there. Quotes one confidential sourced advisor, “the firm caters to the lowest common denominator advisor.” He says, “it is no longer Mother Merrill that nurtured me and my business and now it’s only the BOA shareholders who see me as just another number.”

Growth Grid: 60% of Merrill Brokers Scored Higher Payouts in 2021

Around 60% of Merrill Lynch brokers earned more last year under the firm’s “growth grid” that ties their compensation to attracting new customers and assets, a company spokesman confirmed.

Another 22% of Merrill brokers had their pay cut for not meeting targets while 18% maintained their payout rate. The grid, which was introduced in 2018, adds or subtracts one or two percentage points from broker payout rates for net household and asset growth.

Merrill executives touted the numbers as a strong recovery from the pandemic-afflicted 2020 when only 48% of brokers qualified for a higher pay level and 30% saw a reduction.

“Merrill advisors enter this year with tremendous momentum, having achieved best-ever growth grid results in 2021, and many having had their best year ever,” Kirstin Hill, Merrill’s chief operating officer, said in an emailed statement.

Merrill is set to pay a net total of $134 million in additional compensation for 2021 in connection with the program, an increase from $72 million in 2020, the spokesman said. That equated to around $15,000 on average per eligible experienced broker.

Under the growth grid, which Merrill kept in place for 2022, brokers must add at least three net new households per year to maintain their current pay or face a 100 basis point cut. They can earn an additional 100 basis points for adding six or more.

Merrill’s growth grid also includes awards and penalties for annual net new assets, requiring at least 2.5% year-over-year growth to avoid a percentage-point payout cut and 5% growth for a 1% grid-rate bump.

The plan also includes a “top performer” bonus that adds a total of 3% to the payout rate if brokers add at least 30 net new households or have $150 million in net asset flows. Around 210 brokers qualified for the top award in 2021, a spokesperson said. That was above the 130 who qualified in 2020 and 100 in 2019.

The growth grid, which took effect the year after Merrill President Andy Sieg froze veteran broker recruiting, helped propel net new households to 22,000 in 2020, a figure that the spokesman said Merrill was likely to hit again for 2021.

That would still be below the 35,000 that brokers attracted in 2019 but well above 2017 levels prior to the grid when the average broker added less than one new account per year on a net basis.

Still, the program has been controversial among brokers, including some who have qualified for bonuses but still said they felt distracted from serving their core customer base by the mandate to prospect.

Merrill also offers incentives to advisors for cross-selling its Bank of America parent’s products or getting clients to use more digital services. In 2019, it stopped paying brokers on the first 3% of monthly revenue they produce–a policy Sieg told brokers during a town hall in October brought the firm in line with competitors’ pay policies on advisory revenue.

Merrill’s net new household growth meanwhile was on track with last year. The spokesman said that a final year-end tally was not available, but that Merrill brokers had added over 16,500 through the end of the first three quarters of 2021, consistent with the first three quarters of 2020 when it added a total of 22,000 for the full year.

Morgan Stanley Wealth Management and Wells Fargo Advisors lean on deferred compensation awards to drive brokers to gather assets. Morgan Stanley told brokers in December it would in late 2022 begin crediting them for new customer assets brought in through the E*Trade self-directed platform, while Wells sweetened its new asset bonus with additional awards for top growers, according to a plan unveiled last month.

Original article: AdvisorHub

Wells Emphasizes Broker Retention in Manager Comp Shake-Up

Wells Emphasizes Broker Retention in Manager Comp Shake-Up

Wells Fargo Advisors’ market leaders and branch managers could face steep pay cuts next year if they lose brokers or fail to bring in new ones as the firm digs in on an aggressive retention and recruiting strategy and seeks to turn around years of attrition, according to sources with direct knowledge of the changes.

As part of its 2022 update to manager compensation, Wells will adjust the criteria for receiving a key element of their annual bonus called the Performance Award to more directly penalize for drops in headcount, according to current and former managers familiar with the plan. The award, which had been based in part on net revenue growth, will next year instead include gross retention and recruiting with all arrivals and departures counting the same regardless of their years of experience or revenue, they said.

One Wells market leader, speaking on condition of anonymity, said he could see up to a 45% reduction to his performance award if he did not bring in a recruit and lost brokers. That compares to what he estimated would be a 10-15% hit at the extreme end for lost revenue under the current plan. (While the percentage breakdown varies from manager to manager, most compensation packages are around 40% salary and 60% bonus, according to the same market leader.)

The new stick is among many carrots that Wells has added for managers and external recruiters to help it rebuild as its sales force has fallen to 12,552, down 9% from the prior year and 17% from over 15,000 in 2016 when its parent bank’s fake account scandal came to light. It comes as Wells also announced earlier this month it would be sweetening pay for its core private client group brokers next year.

The plan was rolled out in recent weeks to about 70 market managers who oversee the field of hundreds of branch managers, according to the sources.

“Managers and leaders are responsible for growing the business across both Wells Fargo Advisors and The Private Bank,” Wells Fargo spokeswoman Shea Leordeanu wrote in an emailed statement. “Their compensation plans fully align with [the Wealth & Investment Management division’s] business objectives, while effectively managing risk.”

Leordeanu declined to confirm the specific figures cited by the manager but noted that the recruiting and retention factors were two of four to be included in next year’s performance award, which will also measure net asset flow and lending growth.

While sources said net trailing-12 revenue had served as something of a proxy for headcount in previous years’ award, the change appeared to be a direct effort aimed at focusing on filling seats as the firm was becoming more averse to declines. Under the current net revenue measure, managers had been able to offset smaller departures with a single large hire during the year.

“Now, the firm’s position is if your headcount is negative–and that headcount includes trainees, underperformers, whoever it might be and regardless of how much or how little revenue they do–if more people leave the firm than you successfully bring in, then your compensation is going to be negatively impacted,” the current manager said.

Wells is also reining in a separate recruiting bonus it had paid managers and will make positive recruiting and retention a condition to receive the full amount. Managers were able to receive up to 8% of a successful candidate’s trailing-12 revenue, but next year will receive 4% upfront and an additional 4% only if they achieve positive headcount growth, according to the market leader.

In their favor, the wirehouse also told managers it will not penalize them next year for brokers who leave a private client group branch but stay in the Wells system by moving to its Financial Network independent unit, the sources said. While the move was a relatively small tweak, it was “definitely good news,” the current manager said.

A former Wells manager, who also spoke on condition of anonymity because he did not have permission from his current employer, noted that while the compensation cuts could be steep for underperformers, the plan overall still includes a number of above-market rewards for those who are growing their market.

“The firm is basically saying, ‘Listen, we’re gonna cut your top if you’re not growing, but if you are hiring, we’re going to pay pretty well,’” the former executive said.

Original Article: Advisor Hub

2022 COMP: Wells Fargo Adopts Single Monthly Hurdle, Sweetens Growth Bonuses

Wells Fargo Advisors told its core group of brokers on Thursday that it is consolidating its monthly pay hurdles to a single threshold from three and sweetening bonus opportunities for brokers who grow revenue, client loans, and assets under management.

While a small fraction of the firm’s roughly 10,000 private client group advisors could see a haircut in pay, Wells Fargo Advisors executives said that it will overall result in higher earnings and compensation expenses for the firm in 2022, an unusual change in the often cost-conscious tweaks that major brokerage firms make each year to their plan.

“We are focused on growing the Wealth & Investment Management business, which we’ll do by attracting and retaining the best advisors in the business, increasing net asset flows, and increasing lending balances,” Barry Sommers, the head of Wells’ Wealth and Investment Management division that houses the Wells Advisors unit, said in a statement.

Wells brokers next year will have to hit a single hurdle of $13,500 in monthly production in order to jump from a 22% to a 50% payout rate, executives said. Under the 2021 plan, they had an opportunity to qualify for a lower $12,500 threshold and a higher $14,250 depending on achieving certain production or client-care targets.

The $13,500 hurdle could result in a small haircut for brokers who had qualified for the lower $12,500 option earlier, but that would only affect about 5% of the force, according to John Alexander, head of the Divisional Network for Wells’ Wealth business. The decision to streamline comes after Wells this year raised its hurdles by $1,000, the first increase in seven years.

Wells is also making it easier for brokers or teams who generate over $2 million in annual revenue to qualify for a flat 50% payout. The 2022 plan will eliminate targeted training and best-practice eligibility requirements for the flat payout rate.

In a nod to some broker qualms, the new plan also excises a client segmentation requirement that advisors have 75% of their roster as clients with $250,000 or more in assets to qualify for the flat 50%. (Brokers still face a reduced 20% payout on households under that threshold, which they are encouraged to send to call center brokers or trainees.)

The Wells managers also increased and uncapped deferred compensation bonuses that pay out over five years in an effort to encourage brokers to gather more assets and boost client loan balances.

Wells’ net asset flows award will include a new tier for brokers who add at least $5 million and will pay 50 basis points on new money over that amount. The firm is also removing a $250,000 cap on the award, meaning some brokers could see “very very large awards” next year, according to Wes Egan, head of partnerships, teams, and succession planning for Wells’ Wealth division.

Wells Advisors is also eliminating a $100,000 cap on a lending bonus, which pays brokers a deferred credit of 50% on a mortgage or one-time loan revenue and 150% of the growth in securities-based or similar loans generating recurring revenue based on a 2021 baseline. (Brokers must produce over $400,000 to qualify.)

It is keeping the same length of service and revenue-based deferred bonuses, which could pay up to 10% more in deferred pay at the top end.

“All the best advisors should be here,” Alexander said. “If you want that to happen, then you have to have a competitive comp plan that pays people for doing a really good job for clients and doing the right thing.”

The high payouts match with Wells’ willingness to open its wallet with top-dollar recruiting deals to advisors who join from the competition and perks to headhunters who source the leads. It has been doing so in an effort to hire above-average producers and also to replenish its brokerage ranks, which have fallen to under 13,000 from more than 15,000 in 2016 prior to its parent bank’s fake account scandal.

“Wells Fargo has become a target for recruiters,” to hire out of, said Andy Tasnady, a compensation consultant, who was not involved in crafting the Wells plan. Overall, he said, the Wells 2022 plan will likely be a “net plus” for many advisors, and thereby help the firm boost retention, but the new benefits will be bestowed mostly on big teams and big producers.

Roughly 10,000 of Wells’ brokers are in the core private client group, while the rest are in the firm’s bank-based channel, the independent broker-dealer or the private bank, according to previous tallies that had been included on company websites.

The bank-based brokers, which were integrated with the private client group in 2018, will continue to be paid on a more typical wirehouse-type pay grid that pays between 22% or 46% of revenue. The firm is sweetening the pot next year for bank brokers by eliminating a 12.5% payout penalty on households referred by the bank.

“We want FAs to get referrals from the consumer bank, so we’re going to take that penalty away,” Egan said.

As part of their efforts to further integrate the units, Wells executives “entertained” the possibility of unifying the PCG and bank-based advisors’ compensation plans, but ultimately decided against it for now, Alexander said.

​​Wells’ relatively small tweaks for 2022 mirror positions taken by its rival wirehouses Morgan Stanley Wealth Management and Merrill Lynch, which also mostly avoided raising hurdles for brokers next year.

UBS Wealth Management USA made more dramatic changes, unveiled in November, to its 2022 plan, which retooled its broker pay grid and bonuses and raised pressure on lower producers.

Original article: Advisor Hub

2022 Comp: Merrill Sweetens the Pot for Brokers Taking On Defectors’ Accounts

Merrill Lynch Wealth Management is making it more lucrative for brokers to try and retain customer accounts when advisors in their office leave for the competition, a senior executive said in announcing the firm’s 2022 compensation plan on Tuesday.

Starting January 1, Merrill is ending a penalty that was put in place in 2018 and reduced payout on accounts transferred from a departing broker by 50% for the first year and will instead pay the assigned broker on the full amount of revenue those accounts had generated, the executive said.

Merrill also widened the time window brokers have to solidify relationships with transferred clients from one year to six months, the executive said. During that year, Merrill will refrain from having the lost account dock brokers’ net new asset flows, which would hamper their ability in some instances to hit targets for bonuses. Merrill expanded the time to one year based on broker feedback, the executive said.

“Our goal is to make sure you can have confidence in retaining clients knowing you won’t be impacted by any losses for a full year, and you’ll be compensated for any effort you are putting into retaining those clients,” Kirstin Hill, Merrill’s chief operating officer, said in unveiling the changes on separate a call with brokers on Thursday, according to a person who listened to the call.

Merrill is also keeping unchanged the breakpoints in its core cash grid that pays brokers 34% to 50% of revenue but will adjust how it calculates brokers’ payout level. Under the 2022 system, brokers will qualify for their pay hurdle each month based on rolling 12-month production rather than setting payout based on an end-of-year snapshot with a mid-year look back.

The new system is more friendly for customers and regulators because it does away with the potential conflict for brokers to try to generate additional fees and commissions to hit a higher hurdle by the end of the year.

“Perceived or real, it is a concern among regulators, and we are an outlier in terms of still having that,” Hill told brokers.

Rival wirehouse Morgan Stanley, for example, put in place a rolling grid system in 2018. (Similar to Merrill’s transferred account policy, Morgan Stanley also in 2016 said it would not pay brokers on accounts transferred from defectors unless they retained at least 50% of assets after three months.)

Merrill is leaving unchanged the so-called growth grid, which was also introduced in 2018 and adds or subtracts 100 basis points of payout depending on net new assets and household growth, according to the company. Under the current hurdles, which were reduced during the Covid-19 pandemic, brokers must add a net of three households and grow assets 2.5% year-over-year to maintain their current pay.

Merrill is on track this year to pay a net $130 million in additional compensation tied to the growth grid program, the company said. Around 80% of brokers are set to maintain their current pay or receive additional compensation this year.

Merrill’s 2022 plan also maintains its team grid policy granting all members the cash grid rate of its top producer as long as the team meets a “client engagement standard.” Roughly 90% of teams have met that benchmark, which requires that 30% of the team’s clients are purchasing services from parent Bank of America or Merrill in three of the four following categories: fiduciary investment advice, trust and insurance, lending, and core banking, the same executive said.

Merrill will provide the 10% who have not yet met the standard until 2023 to do so, as well as leave all of those that qualified in 2021 as eligible for next year, the executive said.

To some brokers’ chagrin, Merrill Lynch Wealth Management President Andy Sieg, who last month telegraphed few changes, acknowledged on the Tuesday call with brokers that the firm was keeping in place a controversial 3% haircut that the firm introduced in 2019 on their production credits.

“This is a common feature across the industry in advisor compensation plans,” Sieg told brokers, noting many competitors hide similar haircuts in how they credit brokers on advisory revenue. “It helps us further invest in you and the firm.”

Hill also noted that the plan has a cap at $40,000 of ineligible production credits per year and the highest cash payout amount that a top producer could lose is $25,000.

“Certainly, you can rest assured it will be reviewed again as it was this year,” Sieg said of the haircut.

In recent months, Merrill has sought to soothe broker qualms as dozens of high-end producers have jumped to the competition. The wirehouse in August launched an eight-week campaign, tagged Project Thunder, that highlighted policy changes it was making based on advisor feedback. The changes included: relaxing the rules for onboarding clients with marijuana-related businesses, plans to increase brand advertising, and the introduction of a  new mobile tool called the Mobile Advisor Experience or “MAX” that integrates several broker desktop features into one application.

Sieg told brokers on Tuesday he did not have an expectation that it would solve all of their concerns but hoped they would see it as a “downpayment” on the firm’s willingness to make changes.

Merrill has also made other changes to improve retention of clients of departing brokers, including piloting a program of “client experience specialists” who call on customers as soon as their broker leaves to introduce them to a new broker at Merrill and offer incentives, such as fee discounts, to those clients who stay behind.

The comp changes are also being unveiled on the eve of Merrill opening a new, higher-paying Client Transition Program for retiring advisors that were announced in 2019 but does not officially start until November. The program, which is open to those who are 55 years old and have at least five years of service at Merrill, has a first wave of enrollees who will start in the program next week, the person said.

Original article: AdvisorHub

Merrill’s Retention Bonus Won’t Stop the ‘Heard’ from Running

In conversations with several sources ‘in the know,’ we’ve learned that Merrill Lynch is asking very select, large ‘elder’ producers to sign what sound, look, and smell like retention bonuses but are being sold as retirement compensation.

This is not an original playbook since Morgan Stanley tried the same trick years ago but failed.

Here is the setup from one of our sources:

“Merrill Lynch is telling advisors/teams above $5M to take a payment of 100% of their current T12 and connecting it to their retirement deal. In other words, take about half of your retirement deal now (which is upwards of 250%) and sign this document that you are staying and keeping your business here at Merrill.” Is this a perk or ploy? Read the fine print, you cannot leave the firm and must retire at the firm but also worse.

Gershman Group

“You can imagine what the unspoken consequences of not signing that deal look like to management. If you don’t take the cash it signals that you are more inclined to leave the firm than stay. Now you’ve got a target on your back. If you dot and I or cross at wrong you’ll get fired. That’s the intention here. So this isn’t a retirement bonus, but rather a retention scheme.”

We spoke to another source that backed up these claims. All of this is being done in a very quiet, closed doorway with the firm’s oldest and largest producers. And Merrill has set a precedent over the past year that they won’t blink in firing big producers – not just for industry violations, but rather internal firm policy violations.

As, effectively, Merrill is just trying to look like they care about retaining the ‘Heard’ but only care to retain those they feel are most likely to leave who may receive a double-dip deal (a full 300% + a retirement deal of another 250%= 500%). They can put this kind of pressure on advisors and not worry about the cultural implications since it is no longer Merrill’s culture, it BOA’s. Keeping it ‘niche targeted’ to its top 10% or so of producers makes it seem/feel almost like a perk.

Take a step back and consider the cost. What sounds too good to be true probably is – a financial firm doesn’t give money away for free. Think about it.

U.S. banks see wealth management boom on borrowing, new assets

Big U.S. banks’ wealth management businesses put in another stellar performance in the third quarter, buoyed by record levels of new money flowing into accounts and surging demand from clients to borrow against their investment portfolios.

Morgan Stanley Inc (MS.N), JPMorgan Chase & Co (JPM.N), Bank of America Corp(BAC.N), and Goldman Sachs Group Inc.(GS.N) each reported double-digit growth in wealth management loan balances and revenues this week.

While the COVID-19 pandemic devastated large chunks of the economy and put millions out of work, extraordinary government measures aimed at mitigating the economic blow have also boosted the fortunes of the wealthy by pushing down interest rates and driving a massive stock market rally.

Global financial wealth soared to a record high of $250 trillion in 2020, according to a June report by Boston Consulting Group.

That has increased demand for money managers, increased the value of assets managed by these brokerages, and made it more appealing for customers to borrow.

“At the high net worth end of the spectrum, lending products have been very healthy and you’re seeing that at firms like Morgan Stanley where wealth management loan balances are up over 30% year over year,” said Devin Ryan, an analyst at JMP Securities.

Morgan Stanley’s wealth management business reported revenues of $5.935 billion, up 28% from last year. Wealth management loan balances reached $121 billion, up 33% year on year, mostly from clients taking out mortgages and borrowing against their investments.

A booming area of lending for wealth management brokerages, so-called securities-based loans or lines of credit, allow clients to borrow up to a certain percent of the value of their investment accounts to spend on anything except more securities. As those investment accounts have grown in value, so have loans.

Bank of America’s Merrill Lynch Wealth Management reported record revenues of $4.5 billion, up 19% over last year, while loan balances grew 10% to top $133 billion.

At JPMorgan’s asset and wealth management business, revenues were 21% to $4.3 billion, while average loans rose 20% from last year.

Both Bank of America and JPMorgan said the primary driver of loan growth was securities-based loans, followed by mortgages and custom loans.

Morgan Stanley, which gets around half of its revenues from wealth management, said net new assets rose by 89% to $135 billion in the third quarter from the prior quarter, helped in part by the acquisition of a group of retirement advisers that brought $43 billion in fee-based assets to the bank.

Bank of America reported that, over the past year, it has brought on more than $112 billion in net new assets across its global wealth management business.

Merrill Lynch also added 4,200 net new households, the bank said.

Goldman Sachs, which has a smaller wealth management unit catering to the extremely rich, said wealth management net revenues jumped 40% from last year to $1.64 billion, while loan balances were also up 40% to reach $42 billion.

JPMorgan does not break out net new assets for its asset and wealth management business.

Original article: Reuters

Morgan Stanley Poaches Billion Dollar Advisors From Citi

Morgan Stanley landed a team of seasoned, high-producing advisors—the latest big recruiting move amid a competitive market for elite talent.

The firm’s newest hire, The Hanes Haber Group, came from Citi Personal Wealth Management, a unit of Citigroup. The group’s namesakes, advisors Robert Hanes and Josh Haber, are industry veterans based in New York.

Joining them in the move to Morgan Stanley are advisors Adam Wood, Dennis Lee, Erez Avidan, and Dillon Walker; financial advisor associate John Vigh; and client service associates Brandon Lyons and Anchal Rana.

That group had approximately $1 billion in assets under management and $8.9 million in annual revenue, according to a source familiar with their move.

The team’s profile, still available on Citi’s website as of Friday afternoon, listed several additional team members who appear not to have joined Morgan Stanley. They are wealthy advisors Damian Pereira, Gonzalo Blanco, Lisandro Enferri, Mariano Pinto, Peter Nielsen, and Timothy Shaw.

A spokesperson for Citi declined to comment on the matter.

Haber joined Citibank’s high-net-worth platform in 1999, according to his profile on the bank’s website. Five years later, he co-founded the Hanes Haber Group with Robert Hanes.

“It was Josh’s vision to build a team of financial advisors with different core competencies to best serve their client’s needs,” the website says. “The team was developed with a core focus on financial planning and custom asset management for high net worth individuals and their families.”

Hanes started working at Citibank in 1990 as a management associate in the company’s executive training program, according to his profile on the company’s website. He became a financial advisor three years later.

Morgan Stanley left the Broker Protocol, an industry agreement that eases advisor transitions between employers, in 2017 and cut back on recruiting at the time. It’s since stepped up its efforts and picked up some notably large teams. For example, in August, the firm hired Dane Runia and his $3.2 billion teams from Merrill Lynch. Runia was featured this year on Barron’s Top 100 Advisors and Top 1,200 Financial Advisors. In February, Morgan Stanley hired ex-Merrill advisor Robert Runkle, who was on Barron’s Top 1,200 advisor ranking in 2021; his team’s assets were listed at $1.2 billion.

Originally posted on Barrons.