Tag Archive for: Bank of America

“It’s a Spigot Here”- Billions Flow Out of ML This Week

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You know the old saying on Wall Street “the trend is your friend?’’ Well, that is certainly the trend at Merrill/BOA. Or should we call it when it was, Merrill Lynch which was the envy of Wall Street for decades? Now it’s down to just Merrill/BOA, and then minimized down to just Merrill, a BOA company/division, and predictably will just be Bank of America alone. It’s no wonder why one resident director manager source who we spoke with on condition of anonymity “it’s a spigot here”.Even managers are now looking to exit.

Consider Roshan Ghaznavi, who also was a resident director joined UBS yesterday morning. He started at ML in 2008 and has been Resident Director of the Woodland Hills office doing $4.3M in revenues on $600M AUM. He was also part of the AGM advisory counsel at Merrill and was well respected within the group and by his colleagues at the firm. He is joined by his junior partner Matt Seukunian and 2 client associates.

Adding to the exits at Merrill, Brian Coatoam also left earlier this week. He was producing $3.6M on $560M moved to RBC from the Winter Park/Orlando area.

“Advisors from Merrill are being heavily sought after by all firms including many independent platforms,” says Roger Gershman, a recruiter who specializes in Merrill Lynch teams.
According to several of our sources of industry professionals, many advisors at Merrill are just fed up with what is clearly a major cultural shift and a different means of doing business than they have been accustomed to. A spokesperson at Merrill did not immediately return a request for comment.

“We are fielding a good amount of unsolicited calls from advisors who also care to receive top dollar for their practice and platform is best for their clients whether a bank or complete independence. “

Firms seem to be offering bigger money to ML teams than other firms with some aggressively increasing their offers for the last half of 2022. Advisors are taking notice and using this to their advantage to achieve the highest economics ever seen.

“The writing is on the wall” says another advisor in the search to exit imminently.

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

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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

Merrill Culture In Six Words: “Call me on my burner phone…”

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No reasonable participant in the wealth management landscape would argue against the erosion of the once and former strongest culture in the space: Merrill Lynch.

Under the leadership of Bank of America and Andy Sieg Merrill Lynch culture has evaporated, utterly and completely. In a prescient moment with an advisor last week, we found the essence of that epic erosion:

“Call me on my burner phone, everything else is monitored.”

Six words that should scare anyone that still works at BofA/Merrill. Call me on my burner phone. It’s like this guy is acutely aware that if he makes even the slightest misstep the ‘cartel’ that is BofA will show up unannounced and end their career.

The concern and need for a burner phone is certainly well founded. More than $200B in (NET) client assets have exited the firm in the past four years. A reminder that no other firm in the industry comes close to those numbers.

To break that down further, that’s 100 of the biggest teams in the industry. Based on publicly available data, the top 1% of the industry (advisors and teams) manage more than $2B in client assets. So BofA/Merrill has lost ONE HUNDRED of those teams in the past four years. That is a remarkable stat.

There are endless analogies that would drive home the need for a burner phone as a Merrill advisor. No matter which you use, any culture that forces you to use one can be summed up in one word: toxic.

Bank of America Changes Trainee Contracts – Forces Them To Sign Or Be Fired

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If you have decided to go work for Merrill Lynch, under the ownership of Bank of America, in the past 3-5 years – make no mistake, you are a banker. Make no mistake.

Read this quote from Andy Seig a bit ago and tell us if you disagree:

“We’re uniquely positioned to identify future advisor talent while they’re still, in many cases, working in other lines of business, particularly within our consumer bank, in our Edge business, where they’re already licensed to do securities business and are advising clients and then have an aspiration, over time, to become advisors in the Private Bank or at Merrill.” Sieg made these comments on June 14 during an online Morgan Stanley Financials, Payments & Commercial Real Estate Conference.

Notice that the ‘Merrill’ inclusion is at the end of a long line of banking positions. A new Merrill trainee now has to navigate a maze of banking roles to ever find their way to the actual desk of a Merrill advisor as most of you reading this understand.

But wait, there’s more…

When presented with new agreements associated with new roles and career paths, trainees were given an ultimatum: sign it or your services are no longer needed and you’re fired (and here’s a little severance so you’re not actually fired). And then Merrill was ecstatic that 96% of those in the program signed it.

Take a minute to re-read that last sentence because it’s a big deal. BofA signaled their ability to lock in trainees as bankers and remove ALL OF THEM from any participation in the broker protocol.

If you think that Merrill remains in the broker protocol you’re fooling yourself. It’s the same as believing that Merrill still has nearly 20k advisors at the firm. Neither of those things are true. Fully half of Merrill’s banker brokers are now under non-solicit agreements and ineligible for inclusion in the broker protocol.

The entirety of this article can be summed up this way – BofA/Merrill continues to look more and more like J. P. Morgan and less and less like Morgan Stanley

PUPPET MASTERS – Bank Of America Stiffs Field Management On Year End Bonuses; Not Profitable Enough During The Pandemic

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If you thought that Bank of America couldn’t do any worse in screwing up a once proud brand like Merrill Lynch, you were wrong. Last week they proved that the puppet masters pulling the ‘Merrill A Division Of Bank Of America’ strings aren’t finished killing off a once proud brand.

You really can’t make this stuff up. In a year that saw the current office-based wealth management business model get completely turned upside down, BofA thought it was a great idea to punish branch managers and other field management by cutting bonuses 30-60%. Those affected simply didn’t do a good enough job growing assets and selling enough bank products.

Seriously, why does anyone still work there?

A little reminder that Merrill basically isn’t allowed to recruit anymore. So managers are severely hampered on the NNA front; effectively at the mercy of the markets. Their best teams (read: with the biggest books and AUM) have been leaving in droves, so bonus cuts based on reduced asset growth during a pandemic while not being allowed to recruit – ludicrous, if not downright cruel. Again, puppet masters.

This is the reality for the ‘bonus pool’ for Merrill’s nearly 100 market leaders/managers. Pay (forget calling it a bonus, it’s PAY) was cut by 30% from 2019. That is 570 branch offices across the country who count on 50-75% of their total comp through bonuses. Good thing those government stimmy checks went out last month. :(

Even worse, some Market managers in the bottom third of performers got hammered with up to 60% reductions in expected bonuses. And one last kick in the crotch… a cut of this size has never occurred at Merrill. Never.

So to recap: your a Merrill manager of some sort, you can’t recruit, you are losing big teams every month, your name is no longer Merrill Lynch, your pitching bank products, during a pandemic, while working from your den or basement – and the bank you work for decided “hey it’s not good enough so here’s an unprecedented cut in your annual compensation.”

Does anyone check Andy Seig’s bonus payout??

Merrill Lynch Shuffles Deck Chairs In NYC; Names New Market Head But Eliminates Another Complex

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Merrill Lynch keeps shrinking. Across the US ‘real’ advisor headcount (not BofA bank branch advisors and Merrill EDGE hires) has been in decline since 2010, a decades-long run, and regions, complexes, and markets have shrunk as well. Another example of this was just announced in the financial capital of the world – New York City.

In a memo sent to advisors and staff a former UBS manager was named as the new ‘market executive’ in the firms Rockefeller Center branch; a branch known to be a bellwether for the BofA/Merrill brand. Mr. Correa was hired last year away from UBS. Mr. Correa transfers over from Merrill’s Park Ave branch and replaces the interim market executive Courtney McCarthy. The moves were announced by the Fifth Ave complex manager Matthew Grossman.

Also discussed in the memo from Mr. Grossman, besides the announcement of Mr. Correa’s arrival, was the shuttering of the Manhattan East complex that Mr. Correa had just left. That complex would be merged with the Fifth Ave complex and be redubbed Manhattan Central. Is anyone else’s head spinning??

The upshot is that Merrill Lynch is consolidating complexes, reducing manager headcount, and dealing with large-scale departures in locations that used to be the envy of every wealth management brand in the world. Now, it is nothing more than the shuffling of deck chairs to satisfy the bean counters at Bank of America. Profitability, costs, associated bank product sales, loans, and household quotas matter more than the brand and the people that work within it. Another adjustment to a flagship complex (shutting it down completely) is just more proof of that.

So to recap, the Rock Center complex was shut down, merged with Manhattan East, named Ken Correa the new ‘market executive’, but is managed by Matthew Grossman, while the former interim ‘market executive’ Courtney McCarthy is demoted to Associate Market Manager. Got it? Good.