Rumor – Renewed Protocol Strategy Chatter Bubbles Up Again At Merrill Lynch; To Stay Or Go

In several short conversations over the past two weeks, the specter of a Merrill Lynch/BofA protocol exit seems to have found new life.

Despite denials in early 2020 by the firm’s senior management team, that an exit wasn’t on the table short term, nothing was said about it being completely off the table long term either. It seems that omission was either strategic or possibly prophetic.

As we hear it, the continual and aggressive drain of large scale teams and billions in client assets has given management reason to take another look at the protocol exit moves made by UBS and Morgan Stanley. The decision has certainly served Morgan Stanley well and has become significantly more palatable to advisors at MS.

Merrill Lynch is weighing the pros and cons of executing the same type of strategy. While we may not know how a decision shakes out, or if it simply continues to be a potential weapon that remains on the table should a larger crisis shock the economy at some point – a protocol exit wouldn’t surprise anyone for Merrill and BofA.

In fact, it would be decidedly ‘on brand’.

Rumored JP Morgan Securities Protocol Exit Could Damage Practice Valuations, Complicate Transitions

In a move that may not surprise anyone (given the continuing consolidation of advisors inside the JP Morgan ecosystem), we are hearing that JP Morgan Securities is about to bow out of the broker protocol.

The move would serve to make it more difficult, and incrementally litigious, for advisors at the firm to move to a competitor. Should these rumors be ultimately true every advisor of note at JPMS should be scurrying to gather their due diligence on potential greener pastures – a protocol exit is an easy sell when convincing clients why you chose to leave the bank.

JP Morgan has made a concerted effort to consolidate Chase, JPMS, and the Private Bank in hopes to make sure the client experience is the same across all platforms (i.e. lending, asset management, reporting, trust, and estates). The idea being: if there is one client- there is one advisor.

That advisor representing the entire firm, though, should endure the same restrictions (non-solicit, non-compete, and non-protocol) as their brethren at Chase and the firms Private Bank.

Make no mistake, a protocol exit for JPMS advisors will have a direct effect on their practice valuations. In the same way that UBS and Morgan Stanley teams were adversely affected in the months following each firm’s protocol exits; the same dynamic will be in play for JPMS advisors. The smart move is to act with purpose and urgency.


Merrill Lynch Advisors Shook: “…new workstations using AI to spy on us.”

Merrill Lynch formally announced a brand new workstation for advisors that have already been rolled out to 5,500 of the thundering herd so far this year. The other 10,000 or so ‘advisors’ (let’s not have the conversation today about Merrill’s actual broker headcount please) underneath the BofA umbrella will have the new system installed over the coming months. While the new workstation has all sorts of bells and whistles and cost BofA nearly $100M in development cash, advisors are worried about one thing and one thing only – the AI inherent in the system and its ability to hear, see, interpret, and control every keystroke, word spoken, and client interaction.

While Merrill was quick to trot out several promotional quotes from their corporate PR arm, advisors are acutely aware of what this new system is: a modified system to serve as a legal control mechanism that expertly flags any advisor with an eye towards leaving the firm. Here are some of the quotes from Merrill on the corporate side of things:

“The advisor of the future needs to be able to offer highly personalized service, enhanced by a digital experience,” Merrill spokesman Matthew Card said yesterday. “Technology allows advisors to serve clients at greater scale, recapturing for them the capacity they need to spend more of their productive time on client engagement.”

And this particular gem: “What we are able to do is mine activity across the entirety of the banking and wealth relationship. That gives you insight into anything that is important to the client.” – from Kabir Sethi, head of digital wealth management for Merrill Lynch and Bank of America Private Bank.

A clear admission that Merrill Lynch is using advisor input, both active and passive (read that again), to gather data about what is going on in and at the desks of financial advisors at the firm. A frightening specter that two advisors spoke to us about overnight.

An advisor on the west coast had this to say:

“From what I’ve heard there have been some really creepy stuff come from the ‘suggestions’ that this thing will make connected to both client activities and feedback that it is picking up. Two guys I know that were in the pilot program said that there are strange similarities to Facebook and Alexa in that they can be talking about a client before they ever pull up the account in the system, and a few minutes later they will get an alert about that specific client. The system was listening to their conversations. Now imagine if you are having a conversation with your wife or significant other in the privacy of your office?? I guess none of us should assume any semblance of privacy anymore.”

An advisor who was in the pilot program was even more explicit about what he thinks is going on and how he dealt with the spying aspect of the new system:

“It was obvious to me that the system was listening to every word I was saying and every single keystroke. After one week I didn’t take any personal calls from my office or make any. I would leave the office and nearly the building altogether. I would either wait until I was out to lunch or out of the office altogether. It is really fucked what they are doing. I’m sure there is legal language somewhere in Merrill’s policies that allows for this and removes any assumption of privacy. They may not have opted out of the protocol, but this may actually be worse.”

This isn’t necessarily new to the industry. Just last year UBS’s new leadership touted the ability of the platform to pick up all manner of communication that advisors are having with clients under the guise of ‘better serving clients’ by monitoring the activities of advisors via the firm’s CRM. Creepy as fuck.

Prediction – two of them actually; this will drive more big producers away from BofA/Merrill and into the arms of rival firms, but this isn’t the end of spying systems within the world of wealth management. They will become more prevalent and ubiquitous under the guise of client service. We’d recommend being careful and retaining your own personal counsel.

RUMOR: UBS Set To Land Massive Goldman Sachs Team; Could Be $15M+ Rev, $5B+ AUM

There are rumors swirling within the wealth management world that UBS is about to land a massive Goldman Sachs private banking team. Sources at UBS have passively confirmed the potential move with a wink and a smile via text and signaled that we should keep a sharp eye out for a pending announcement.

UBS has taken considerable interest in Goldman Sachs advisors and larger teams over the past six months and ‘leaned in’ to those recruitments inside of the COVID-19 pause in the industry. The expectation is that this particular transaction is pending and will trade in less than 30 days.

As UBS pursues private banking teams they’ve also taken an interest in Alliance Bernstein, and J.P. Morgan. Private banking teams of scale have engaged with UBS often because of the largess of the deal being offered.

Historically these types of teams have been offered discounted deals based on the perceived stickiness of the assets that they manage at their current firm. UBS has decided that those rules don’t apply anymore and are offering ‘wire to wire’ traditional deal terms to pry away the biggest teams.

When this deal finally closes we could be looking at a number larger than $50M in total bonus dollars.

Goldman Sachs Botches Response; Emails Passive Denial Of Details Of Sexual Harassment Claims

Goldman Sachs attempted to reach out to us yesterday in hopes of reducing the interest that our story garnered regarding two individuals that had dealt with differing degrees of sexual harassment at the global investment bank. The denial was both weak and soft and didn’t remotely speak to the veracity of the allegations themselves, but rather to the release of the information and whether or not it was appropriate to leak the nature of ‘sealed agreements’. Saying that again, their response was weak.

The specific email that we received asked us to remove the article on the basis of privileged legal information that was agreed to by all parties at the time. (Should they really be sending an email with the term ‘privilege’ in it right now?) No denials of the claims made by the women, no denials of the existence of the women and their circumstances, no denials that there is potentially a systemic issue among some managers in the wealth division, and no commentary that the firm is doing its part to clean up the problem. Just threats.

A reminder of what was alleged in the article regarding sexually charged claims that were settled at the firm and how those claims were viewed by the victims themselves. A quick look back at one quote that sums up, in comparison, how weak Goldman’s response was late yesterday:

“During the investigation, which took more than 8 months, I was passed up for a promotion that, per the criteria, should have been a foregone conclusion. It was right there that I decided to leave the firm. When GS offered me a settlement I agreed and left the firm 90 days later. Easy decision. I wasn’t about to let those fuckers stunt the growth of my career.”

One of the victims chose to stay at the firm for 8 months, no doubt enduring being ostracized and whispers as the investigation dragged on. She should be celebrated. And having the will to leave one of the most powerful firms on Wall Street is a real act of courage. Goldman asking us to take the article down was a gift to us, so thank you for giving us the opportunity to print a follow-up article on this issue.

A quote that sums up the other victim’s reality and further proves the ‘weak hands’ of Goldman’s legal team:

“It took me a week to report it and the trauma of dealing with a snake that masqueraded as a friend was traumatic. Ultimately I stayed here because I thought remaining was the more important choice than walking away. Needless to say, my ‘friend’ was fired.”

And bravo to her for staying at the firm, fighting for her rights, and probably fighting for change as well. We can assume that nobody is going to be stupid enough to fuck with her going forward.

We do expect to get another email/letter of some sort from Goldman regarding this story as well. Please send it – we will simply post the screenshot of it and provide the much-needed context.

Merrill Lynch Smoke And Mirrors; Effort To Boost Sliding Advisor Headcount Falls On Support Staff ‘Pathways’

Merrill Lynch remains a constant loser in the world of wealth management recruiting. They’ve continued to retreat as rivals like Morgan Stanley, UBS, Wells Fargo, and the likes of Rockefeller and First Republic clean up. When was the last time you saw a meaningful Merrill Lynch recruiting headline announcing the arrival of a new team? Exactly.

So what seems to be the go forward to keep advisor headcount steady and sinking an additional 10-20% over the next few years? Simple, add as many Merrill Edge brokers as possible, reclassify BofA ‘in-branch’ advisors as Merrill Lynch, and create a new pathway for admin staff to become advisors themselves. At this point, Merrill Lynch has officially become the IBM of the wealth management game. Old, out of ideas, shrinking, but willing to play cheap parlor tricks to feign the illusion of growth.

What looks to be a new initiative to be announced in September, client service associates will be given a new pathway to moving from general admin positions to advisors filling the roles that their bosses do. Yes, welcome to 2020 Merrill Lynch. It seems that the era of ‘Mad Men’ may slowly finding its end at the thundering herd division of Bank of America. (commence eye roll).

There will be a set of qualifications for support staff to join the new ‘pathway’ at Merrill – candidates will have had to be at the firm for three years, be licensed with FINRA, and then complete a 9-12 month training course. We also expect 99% of these new candidates to either join the current team they are working with/for as opposed to starting from scratch. With that reality, is this really a pathway to becoming the next Barron’s 100 advisor? It feels more like a pathway to boosting ‘registered’ headcount that is capable of inputting orders when the big boss is out on vacation or playing golf. We are happy to be proven wrong, but until we hear of this program turning aspiring support staff into advisors in control of their own destiny at the firm, consider us skeptical.

Otherwise, the IBM and Merrill references will continue.

Goldman Sachs Or Goldman ‘Sex’; Rumors Of Off-Book Settled Claims At Firms Wealth Division

Goldman Sachs seems to have a problem on its hands in their wealth division with women that have either been harassed, reported abuse by superiors, or as seems to be the most common complaint, the pressure to ‘cozy up’ when called upon by management. Over the weekend we had an illuminating discussion with two women (one who continues to be employed by the firm, and one who has since left) that both settled claims against their employer. Both discussed the nature of the environment in which they were asked to do things ‘differently’ than make colleagues, and were willing to give us details on the condition of anonymity.

Some initial context to these discussions – both instances and victims worked in the Dallas office of Goldman Sachs. One was an advisor in the firms wealth management division and the other was an executive assistant on one of the larger teams in that same location. Niether woman claimed (independently, as we honored the anonymity even within the conversational cross reporting) to have any knowledge of other reports or settled claims at their location; they simply wanted their info to find the light of day, versus buried in off book settlements.

“The environment within the financial services industry is always going to have an inherent bias towards masculinity. It is risk and high energy and performance based compensation that draws the interest of men at a larger percentage than women. I get that and understood it from day one. But what ultimately ended up being the reason I walked away from the firm was much deeper than just understandable bias and a little locker room talk – it was the belief that ‘eye candy’ was an active part of my resume’ and should be used as such with both clients and colleagues. I didn’t appreciate it and it finally came to the point where there was an incident. Look, management wasn’t dumb enough to make advances on site – but the magic of messaging apps exists in 2019/20. An individual in a leadership position was savvy enough to become a friend, and that turned into something else altogether over time. When the messaging began outside of the any verifiable GS tech, I tried to be cool about it but wasn’t comfortable with it. Once I made that clear the attitude toward me in the office turned ugly and I was asked, consistently, to do things professionally that were below my pay grade. I was asked to ‘entertain’ clients; usually the requests came on behalf of single male clients. I ended up reporting the inappropriate advances via messaging apps, as well as the treatment after I turned him down.”

“During the investigation, which took more than 8 months, I was passed up for a promotion that, per the criteria, should have been a foregone conclusion. It was right there that I decided to leave the firm. When GS offered me a settlement I agreed and left the firm 90 days later. Easy decision. I wasn’t about to let those fuckers stunt the growth of my career.”

The above come from one of the women we spoke to, but we aren’t going to identify which of the two positions she held, per the requests that were made of us. Obviously, the behavior that she dealt with was wrong and ultimately settled by the firm. The next disclosure is a little darker, so be warned.

“I really don’t want to go to deep on this but it needs to be out there and any of my female colleagues need to understand that this can happen to anyone. Someone that I thought was a genuine friend and held my same position – we even went through training at the same time – spiked my drink and attempted to take advantage of me. The spiking attempt didn’t have the full effect or else I could have been raped by someone that I thought was a friend. It took me a week to report it and the trauma of dealing with a snake that masqueraded as a friend was traumatic. Ultimately I stayed here because I thought remaining was the more important choice than walking away. Needless to say, my ‘friend’ was fired.”

Two different situations in one location at Goldman Sachs, over the past two years. Much could be written about the role of gender and workplace decorum on these pages, but a simple rule generally solves most issues from every happening in the first place: if you wouldn’t say it or do it with the CEO standing directly in front of you, you shouldn’t say it or do it at all. To take it a step further, the understanding of right and wrong is pretty basic – or as both of these women uttered during our conversations – just don’t be a fucking douchebag.

Rockefeller Set To Win Big In California And Texas; Announcements Scheduled Throughout The Next Three Weeks

Rockefeller remains a darling firm for larger producers. The elite advisor numbers and tire tread marks that have migrated to the firm in the past year isn’t slowing down, and if anything, is picking up momentum. Geographically, the firm is set to win big in a couple of states that matter to growing wealth management firms: Texas and California.

Speaking to ‘in the know’ wealth management recruiters who have relationships with the firm, they expect announcements to come fast and furious throughout all of June – big wins for Rockefeller.

“Things are extremely active right now and Rockefeller is really on their game. I’ve heard that they have three announcements in the can and each team is north of $5M. Big numbers in both Texas and California. They’ve recruited hard throughout the pandemic and are going to have a lot to show for it.” – said a recruiter for Rockefeller on the condition of anonymity.

“Expect announcements in Cali and Texas in June. They may come all in one week or spread out, but the deals are done, paperwork is done… just a matter of resignation letters at this point.” – said a separate recruiter on the condition of anonymity.

There continues to be a strong drumbeat for three issues that make Rockefeller intriguing. The name itself, Greg Fleming’s leadership, and the tech platform they they seem to have nearly perfected. Every single contact we have with anyone engaged with Rockefeller mentions those three points. Everyone.

With announcements pending and another couple billion of client assets set to be added to the firms coffers – the bullet points are hitting their target.

Stay tuned.

EXCLUSIVE: RBC Lands Massive Recruiting Win In SanFrancisco; Alliance Bernstein Head Of Family Offices, Bill Grayson, Takes $6M In Annual Revenue To New Firm

This one will grab a lot of eyeballs. Especially those that exist at Alliance Bernstein. Bill Grayson, National Director for Family Offices at Bernstein Private Wealth has migrated to RBC in San Francisco. He’s taking $6M in annual production and nearly $1B in client assets with him. An absolutely massive win for RBC in the SanFran market and for inquiring minds across the country. It also sends a signal that RBC is willing to wade into the deeper recruiting waters that is private banking and family offices so to speak.

Mr. Grayson has spent 11 years as Aliiance Berstein’s head of family offices after all manner of stints on different boards of distinction. Starting his career in the financial services industry at Montgomery Securities in 1996, he migrated to JP Morgan and eventually landed at Bernstein. He’s been pivotal in growing their wealth management footprint over the past decade, but decided the ‘structure’ (code for payout) wasn’t ultimately optimal.

As you can imagine the competition for Mr. Grayson’s services were fierce given the size of his practice, and the expected ‘tail’ that should follow him to his firm of choice. RBC won the day based on all sorts of factors, but local and national leadership all played a significant role.

More to come…

BREAKING: Morgan Stanley Star Bolts For Rockefeller; Atlanta Broker Brings $300M In Assets To New Location

Rockefeller has continued to consistently win recruiting battles with larger rivals over the past two years. One could make the claim that their strategy has been the most productive across the street by a wide margin. Specific to their success versus long entrenched wirehouses offering massive deals (Rockefeller’s deal is substantial as well)

That success continued this past Friday as a rising Morgan Stanley star migrated to Rockefeller in Atlanta. Brian Lusink snatched up his $1.55M in annual production and more than $300M in assets under management and trotted them over to Rockefeller’s new offices in Atlanta. We spoke to sources at Rockefeller about the move and they were pumped about the momentum that is building in places like Atlanta.

“The strategy continues to be national in scope and this is just another win that highlights that reality. The competition for advisors that are well established and have books that are continuing to grow is fierce. This particular win has much to do with our platform and the tech that we provide – specifically its depth and the ease of use versus our competition. We really like the advantages we have in the tech space and continue to invest in ways that we believe will keep us out front. And while we are talking, keep your eyes on movement in Texas.” – a source at Rockefeller on the condition of anonymity.

Mr. Lusink has been with Morgan Stanley nearly his entire career (better than 25 years) and the larger share of his practice focused on corportate retirement programs. His book grew out of his service to those retirement programs and should transfer to Rockefeller quickly because of those long-standing relationships.

Doing a little math – because that’s what we do here – the total cash register number on Mr. Lusink’s deal could top $4.5 million. A number that could be even a bit higher if Rockefeller popped for the deferred comp balances that Mr. Lusink is leaving behind at Morgan Stanley.

Finally, we continue to hear rumors of upcoming trades ‘of scale’ for Rockefeller in Texas and California. The minute they print we will be here to give you the details.