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Suffocating Compliance – Big Producers At Merrill Complain They Are Being Treated Like Bank Brokers

It isn’t enough that Merrill Lynch is now just Merrill. It isn’t enough that more than half of your colleagues that you respect have left the firm. It isn’t enough that Andy Sieg thinks that advisor attrition is ‘seasonal’. It isn’t enough that no matter your loyalty to the thundering herd and the Merrill brand – BofA just doesn’t give a sh%t about you.

That reality was hammered home again early this week with conversations we had with two large and well known teams. Beyond the cultural rot inherent at BofA/Merrill, the compliance burden has gotten nearly unbearable.

From an advisor on the east coast, “It is hard to describe the insults that come disguised as compliance on a weekly basis. I’ve got a perfect record and have put real effort into being a Merrill guy over the years. But almost every week I’m getting pinged by compliance over dotted i’s and crossed t’s.”

“An example last week… I sent an email to a client with some good news that their mortgage rates had ticked lower by a quarter point. Less than 4 hours later I got a compliance letter that I have to respond to regarding ‘quoting rates’ in a correspondence. It’s like I’m being treated like a trainee or bank broker. And responding to this shit takes time away from growing the business. It’s constant and makes it harder to do business here.”

We did a little digging and found that this has been common practice with BofA over the past year or so. Every email, every text, every syllable is scrutinized. And if you trip up, you’ve given them cause for termination.

We put together a short podcast Q&A with Brian Neville that speaks to the issues that have caused big Merrill teams to exit the firm week after week. The revelations he shared associated with surveillance were mind blowing. When tied to the above quotes it paints a picture of a legal ‘overstate’ at BofA that is cause for serious concern.

Another reminder that more than 200 teams with $1B or more in assets have left Merrill in the past four years. Read that again. It’s becoming increasingly easy to understand why.

TWO HUNDRED BILLION DOLLARS: A Legacy Of Failure For Bank Of America And Merrill Lynch

Often times we forget what has happened in the past because we are so focused on the now or the next. Merrill Lynch advisors are currently focused on rumors swirling with regard to new policies, client retention teams, and a looming protocol exit. They’ve forgotten the level of failure that has been spearheaded by their current management over the past five years.

Two hundred billion dollars. $200B. With a B. BILLION. That’s the number of client assets that have left with long-tenured Merrill Lynch advisors in 4 1/2 years. A truly stunning number. Amazing on every level. That number is the equivalent of liquidating the entirety of client assets held at Robert W. Baird.

Put it a different way: Merrill Lynch has lost 100 teams that manage $2B in client assets. Or 200 teams managing $1B in client assets.

When one steps back and realizes the carnage here it is stunning. Truly stunning.

We wonder how a guy like Andy Sieg still has a job. He’s presided over one of the worst drawdowns in the history of modern finance. That isn’t hyperbole. It’s just the truth. And yet, Bank of America has decided that their response isn’t to reassign Mr. Sieg but rather make him more visible with scripts that claim that “recruiting losses are seasonal”.

And to be clear – when Merrill Lynch exits the protocol and presents their advisors with a new set of legal paperwork to sign, the exits will heat up even further.

Andy Sieg: “Everything is fine, nothing to see here…” (and in the background a once iconic Merrill Lynch brand burns)

Bank of America has effectively kept Andy Sieg in his position as a spokesman for what they want to be said when they want it said, and how they want it said. Nothing more and nothing less.

And yesterday he did just that. Take a look at his quotes regarding legitimately crippling attrition at Merrill Lynch:

“For all these positives, there will always be areas needing focus from leadership. Right now, it’s competitive attrition–higher in this quarter than we’d like to see,” said Mr. Sieg.

“Some of the increase can be attributed to seasonal trends, a bit like what we saw in 2019.”

What? Huh? Please explain a ‘seasonal trend’ in advisor recruiting? And has that same seasonal trend extended over a five-year period as Merrill has led all of its rivals in losing teams and client assets?

And what is the plan to combat the rise in attrition? Commercials aired during MLB baseball game broadcasts. Seriously, LOL.

It is a comedy of errors at a place that for half a century set the pace in the wealth management industry. And Andy Sieg is the face of its continued decline.

**A side note: while Mr. Sieg is proclaiming that aggressive advisor attrition is merely ‘seasonal’ Merrill is prepping for a rumored exit from the broker protocol by instituting aggressive client retention teams across the country. The client retention teams were actually announced by the firm last week. All of that to say this – if you’re still at Merrill, why?

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If you want further proof that Merrill Lynch (actually it’s just Merrill now) has fully morphed into a bank brokerage we’ve got it for you. They aren’t even trying to hide it anymore.

Merrill announced last week that they are moving all client data away from their internal system ‘O Drive’ and over to Salesforce. Some would think that this is nothing more than a tech adjustment/migration and not really a big deal. That’s simply not the case.

Merrill has led the industry in advisor departures for half a decade now. Five years in a row. One could wonder who’s even left, and why are they still there. But for those that remain this tech move means the noose is tightening.

Migration to Salesforce means three specific things, all in BofA/Merrill’s favor:

1. Salesforce provides significantly more ‘big brother’ control to lock out advisors and instantly eliminate access to client data.

2. Salesforce makes it much easier to transfer client data to other advisors when a team leaves for another firm.

3. Salesforce can prevent data exports and downloads of any kind. The information is locked.

So BofA thinks that locking your client data and technically seizing up your computer the moment you leave, will keep you from leaving. Okay.

But that’s not all. In another announcement last week Merrill confirmed ‘client retention teams’ to be deployed when a team leaves the firm. But everyone reading this knows what it really is – a group of staffers searching for potential protocol violations that would be the basis for legal action.

So five years hence, BofA/Merrill has decided that the right way to handle hemorrhages like attrition and a crumbling culture with an updated CRM and client service calls. This is the kind of genius sort of thinking that can be found at legacy banks these days. Read more

UBS Destroying Recruiting Rivals

NEW RECORD: UBS Destroying Recruiting Rivals; Adds More Than $30B In Net New Assets Through April

UBS has taken over the high-end wealth management recruiting market and is showing no signs of letting up. Through the first four months of 2021, ending in April, UBS has added more than $30B in client assets to the firm’s US wealth management operations. Everyone else is scrambling to figure out why and attempting to play catch up.

Somewhere, deep in the bunker that is the UBS recruiting department in Weehawken, NJ, a decision was made nearly a year ago to make two strategic pivots: value private bankers in the same way they value traditional advisors and remove all the hurdles from their traditional rivals deal. An explosion occurred.

Here is a short (but nowhere near all-inclusive) list of the biggest moves to UBS through 2021:

  1. J. P. Morgan Private Bank, Dallas $10B
  2. J. P. Morgan Private Bank, Los Angeles $6.5B
  3. J. P. Morgan Private Bank, Miami $5B
  4. J. P. Morgan Private Bank, Atlanta $9B
  5. Wells Fargo Private Bank, San Diego $2B
  6. BofA Private Bank, San Francisco $2B**a little math above, that’s already more than $30B. Wow.

This recruiting run is unprecedented. Historic. Never been done before. Ever. $30B in four months? There has never been a firm that has approached that number in 6 months across the history of wealth management recruiting.

For comparison’s sake, Rockefeller is currently having a banner year in recruiting with $10B in recruited AUM. So fully an entire 2/3 behind UBS. And if recruiting chatter is any indication, expect UBS’ success to continue.

As we’ve discussed in previous articles the keys to this surge have been the aggressive move into private banking and the removal of all hurdles for teams at firms like Merrill and Morgan Stanley. Other traditional rivals like Wells Fargo and Rockefeller continue to pitch asset/revenue matrix models with hurdles year over year. Effectively, UBS’ has brought a fully guaranteed deal to market.

The response?? The numbers don’t lie – it’s historic.

UBS Makes Noise In The Bay Area; Hires $10M BofA All-Female Team Away From Private Bank

UBS continues to be on a serious recruiting roll across the country. Much of the big headlines are coming from private bank competitors like Bank of America, J. P. Morgan, and Goldman Sachs. Billions of client assets are up for grabs and UBS has significantly opened up its checkbook and is crushing the competition; winning big team after big team after big team.

Their latest win came in San Francisco as they finalized a deal with an all-female private banking team out of Bank of America. The team, nor UBS, has released annualized revenue and client asset data but a source close to the recruitment confirmed that the team brings better than $10M in revenue and more than $2B in assets with them.

The team includes Amanda Woo, Nancy Barrett, and Michelle Harvey, all joining UBS Private Wealth Management in San Francisco. The team is well known in the Bay Area as the most influential banking team at BofA and was seen as a major blow to the firm. Operationally, they will report to both PWM and Erin Borger. **A note real quickly, Borger has climbed the ranks of management at UBS over the past decade closely connected to his recruiting prowess, so his name associated with this win isn’t a surprise.

In the same way that UBS has significantly jostled the comfortable confines of the J. P. Morgan Private Bank across the country, it seems they are doing the same with Bank of America. This is now the third significant announcement of a BofA to UBS migration in 2021, and we hear that more are to come.

At what point will rivals like Morgan Stanley, Rockefeller, and others start paying up for private banking teams the way UBS has?? We don’t know as of yet, but you can bet it’s coming.

Merrill Lynch Gets Clubbed Again; This Time Sanctuary Benefits

As if it is a surprise, another Friday another big Merrill team leaves the firm. And it’s not like it’s just one or two firms that have the secret sauce to lure Merrill teams away from BofA; it’s obvious that any firm is a viable alternative.

This time it was Sanctuary, landing the largest recruiting win since its inception in 2018. Sanctuary is led by former Merrill executive Jim Dickson.
Here are the details of the team that made the transition: $1.5B in assets and better than $5M in annual revenue.
The eight-person team in Walnut Creek, CA are captained by Kelly Milligan and William Barry. The group includes Susan Mazzetti and Melissa Yue, and was proudly announced by Sanctuary’s Jim Dickson.

It’s simply a familiar refrain that has been the one enduring storyline for five years now. Any advisor numbers that come out of BofA/Merrill are nothing but a shell game. They’ve been gutted of their largest and most prominent advisors across the country – while Merrill Edge rookies fill those seats and hang on to the account scraps that remain after a move.
The question still remains – if you’re a serious team or advisor, why are you still at BofA/Merrill?

Merrill Lynch and BofA Destroy Career Of Female Advisor; Admonished By Arbitrator In Expungement Ruling

Merrill Lynch was rightfully tagged with a damning admonishment in an arbitration ruling that included the description of their behavior that included this: “…reckless disregard for the truth.”

Read that again. Reckless disregard for the truth. To be crystal clear regarding the facts of the case – a female advisor (Colette Wigart) was fired for opening a savings account on behalf of a client, the mentally incapacitated client complained, the firm NEVER spoke to the client during their flaccid investigation, a career was ruined.

Here is what the arbitrator said about BofA’s behavior:

“The failure of the respondent to interview the client and accept the allegations at face value, despite her well-known memory impairment…demonstrates a reckless disregard for the truth,” arbitrator Dean J. Dietrich wrote.
BofA didn’t even investigate the allegation even after Ms. Wigart’s explanation of events and the client’s mental health, in an obvious attempt to keep her job. BofA was like, Nah you’re fired. Amazing.

Ms. Wigart didn’t back down, spent the time and legal expense to clear her name, and won. In fact, not only was her record expunged but the arbitrator handed her legal fees to be paid by BofA to the tune of $50,000.

Winning a rightful judgment against a banking behemoth feels great – but the real tragedy is this: BofA ruined this woman’s career as she has been unable to find employment at any subsequent bank of brokerage. Terrible. Heartless. As the arbiter said, “…reckless disregard for the truth.”

Ms. Wigart’s case was strengthened when another of the clients’ advisors gave testimony that he had to end his work on behalf of the client after she had made subsequent complaints about other transactions that she had in fact actually approved.
So what really happened – BofA doesn’t give a shit, will fire you, and won’t even take the time to gather any relevant details; employing the kind of workplace justice that says ‘we dare ya to take us on’. Ms. Wigart did just that and won.
Good for her, and shame on BofA/Merrill.

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

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