Tag Archive for: Merrill Lynch

Merrill Lynch’s Andy Sieg Whistles Past The Graveyard On Advisor Recruiting

There really should be memes created in honor of Andy Sieg. If there was ever a bigger corporate shill for a brand now owned by its banking overlord – it’s Mr. Sieg.

Up is down, down is up. Night is day, day is night. And the best part is, he’s so committed to the messaging that nobody other than his bosses believes.

A quick reminder that all the biggest teams and producers at legacy Merrill have been pulling the escape hatch for half of a decade now. Over and over and over again. Nearly $250B in client assets have left the firm in the past five years.

But Andy thinks that big recruiting deals are poppycock and should be frowned upon to the benefit of nameless, faceless shareholders.“We are seeing very elevated multiples for advisers as they are being recruited firm to firm,” Sieg said at the RBC Capital Markets Financial Institutions Conference. “When we see some of the levels of competitive recruiting deals, it’s very challenging that they’re going to produce threshold returns for shareholders.”This kind of inane commentary infuriates the best advisors that are left at the firm. And the thousands upon thousands of bank brokers and rookies that are replacing them are pre-programmed to fall in line.

Get out of Merrill and go get paid. Andy Sieg doesn’t care about you.

Merrill Concocts Feeble Recruiting Strategy (but only if you’re a bank broker)

Let’s play with a little math, shall we? In the past 90 months, Merrill Lynch has lost $230B in client assets due to advisor attrition. Yes, that’s billion with a ‘B’.In 4 1/2 years, based on publicly available data, Merrill has lost the equivalent of 230 billion dollar teams. That is incredible. It’s almost unfathomable.

Their completion at UBS, Morgan Stanley, Rockefeller, and even Stifel have feasted on Merrill lifers now for years. And the eatin’ has been good.

So what is Merrill leadership’s current response? A just rolled out to the field memo, that will compensate market managers to recruit advisors with LOS’ under 12 years that hail from the likes of banks and credit unions. Banks and credit unions. Seriously.“It is difficult to put into words the lack of brand loyalty that no longer exists at Merrill Lynch amongst the remaining advisors and teams. I’d estimate that more than half of large team movement in the industry is coming from one firm – Merrill Lynch. In my thirty years in the business as an advisor and recruiter, I’ve never seen anything like it.” – Roger Gershman, CEO of wealth management recruiting firm The Gershman Group.

Each weekend there is another announcement of a large Merrill team migrating elsewhere. It’s become the one constant in an industry that’s been booming for nearly a decade now.

The only ‘bust’ that anyone can find in this section of the financial world is the once proudest brand on the street: Merrill (formerly known as Merrill Lynch).

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.

BREAKING: ML Loses High Profile $1.7B NYC Team to First Republic

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

Morgan Stanley Draws Two Merrill Private Wealth Teams with $11.8-Mln Combined in Boston and NY

Morgan Stanley on Friday reeled in a 31-year Merrill Lynch lifer in Boston and a four-broker Merrill team in New York producing $11.8 million in annual revenue combined as it continues to keep up the pressure on its wirehouse rival.

The hires followed at least two other million-dollar-plus recruits in recent weeks from Merrill, one in Cleveland and the other in the outskirts of Atlanta that represented another $5.3 million in revenue.

In the largest of the moves, Marcella “Marcie” Behman, who ranked 33rd on Forbes’ 2021 list of America’s top women advisors, left Merrill’s private wealth management office on Friday in Boston to join Morgan Stanley in Middleton, Mass., a Morgan Stanley spokesperson confirmed. She moved with four client associates: Jaclyn Snell, Mary Chase, Owen Murray, and Teddy Smith.

Behman had generated $7 million trailing 12-month revenue from $1.3 billion in client assets, according to a source familiar with her practice. She has a $4 million account minimum for new business, according to Forbes.

Behman had led the Behman Group within the firm’s private wealth unit, formerly known as the private banking and investment group (PBIG), serving ultra-wealthy clients, according to her registration records and former firm biography. She was not immediately available for comment, according to a person answering the phone at her new office.

Her former partner at Merrill, Steven T. Smith, had left in 2018 for UBS Wealth Management USA.

In the other Friday move, the four-broker New York team known as MKM Group decamped from Merrill’s private wealth management unit for Morgan Stanley.

The team, which includes Robert M. Matluck, Lee B. Konopka, Rachel B. McCormack, and Jonathan D. Moskowitz generated $4.8 million in annual revenue from $575 million in client assets, according to a source familiar with their practice. Matluck and Konopka had worked out of White Plains, New York, while McCormack and Moskowitz worked out of New York City in the Bank of America Tower, according to their BrokerCheck reports.

The most senior member of the group, Matluck, a 35-year industry veteran, started at Advest, Inc. in 1983, and worked at now-defunct technology investment bank L.F. Rothschild, Unterberg, Towbin, where he served as a senior executive, according to his LinkedIn and BrokerCheck records. He worked at Unterberg and successor firms before moving to UBS in 2009 and then Merrill in 2013, according to his BrokerCheck report.

Konopka, with 29 years in the business, started at Smith Barney in 1992 and moved to UBS in 2008, and Merrill in 2013, according to his BrokerCheck report.

McCormack had spent all of her 15 years in the industry with Merrill, according to her BrokerCheck report. Moskowitz, with 12 years of experience, started out with Collins Stewart from 2006 until October 2008, next registered with now-defunct brokerage Merriman Curhan Ford & Co. in 2010, and did stints at three other firms before joining Merrill in 2014, according to the database.

A Merrill spokesperson did not respond to a request for comment on either of the Friday departures.

The departures come as Merrill has been looking to moderate rising attrition with a series of policy tweaks, defensive measures, and spurring enthusiasm about returning to offices. A senior Merrill executive last month said the rate of competitive departures ticked back down to 3.9% in the third quarter, in-line with historical averages and down from what a spokesperson previously said was 5% in the second quarter.

Merrill has stood by a veteran broker recruiting freeze implemented in 2017 while Morgan Stanley has been aggressively hiring in recent years and CEO James Gorman last month touted the firm’s achievement of the unusual industry feat of net positive recruiting when comparing the of new hires to those who have left.

The Friday exits followed at least two other previously unreported Merrill-to-Morgan Stanley moves in recent weeks. On November 5, a producing manager for Merrill in Cleveland, Ohio who had spent his entire two-decade career with the firm parted ways with his team to join Morgan Stanley in the nearby suburb of Westlake, according to registration records.

Steven M. Rini, who started with Merrill in 2000 and had been serving as resident director since 2012, individually managed $320 million in client assets generating $1.5 million in annual revenue at his former firm, according to a source familiar with his practice.

Three advisors listed on Rini’s former team’s website, Dan A. Bragg, Steven Wickstrom, and Matthew Meyer, remain registered with Merrill, according to their BrokerCheck reports. The team was formerly known as the DBSR Wealth Management Group but now is called CLE Wealth Management, according to the Merrill website.

Rini and Bragg, who have spent all of his 43 years in the business with Merrill, did not respond to requests for comment for this story.

In Gainesville, Georgia last month, a duo of Merrill brokers who had produced a combined $3.8 million in annual revenue from $480 million in client assets also left for Morgan Stanley, according to a source familiar with their practice and registration records.

Thomas R. Johnston, a 28-year industry veteran who had spent his entire career with Merrill, and J. Thomas “Tommy” Turner, a 23-year broker who had joined Merrill in 2002 from PPA Investments, Inc. on Oct. 1 moved to Morgan Stanley to form the Johnston Turner Group, according to their BrokerCheck reports and team website.

Johnston, who ranked 14th on Forbes’ 2021 list of best-in-state wealth advisors, produced $2.5 million from $360 million of the team’s client assets while Turner produced $1.3 million from the remaining $120 million in assets, according to the source.

The Merrill spokesperson did not comment on the departures in Cleveland or Gainesville, which were confirmed by the Morgan Stanley spokesperson.

Original article: AdvisorHub

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.

Merrill Project Thunder Reactions: “It’s more like Tropic Thunder around here, nobody is listening to that guy…”

Andy Seig has limited to zero credibility left with top tier Merrill advisors left at the firm. When he speaks, nobody listens. When he green lights a new initiative like ‘Project Thunder’ nobody listens. And when he speaks in corporate vague double talk… he’s quickly ignored.

His lack of influence was on display in the last ten days after the announcement of Project Thunder (who came up with that name?). Advisors we spoke to in every corner of the country simply rolled their eyes, while 90% ignored the details of the memo altogether.

Here are several quotes from Merrill advisors we spoke to in the past week:

“My partner and I thought it was laughable. There are no details, no increases to our bottom line in any way. And who came up with that name? It’s a clown show in the C-suite here. Stuff like this only proves it.”

“…it’s more like Tropic Thunder from that guy and his internal bank based PR folks. He’s a puppet of BofA.”

“Wake me up when they announce next year’s grid. If I had to guess, this is window dressing for more shenanigans to our comp, I’d even bet on it.”

“Nobody listens anymore. There is no trust. Zero culture. Using the term ‘Thunder’ as a marketing ploy is even more lame.”

It seems that cynical is the word of the day to describe the vibe at Merrill Lynch. And the proof remains in the pudding, or in this case, data. Large teams leave every week. Every single week.

And we hear, that teams that are in the fence are waiting for another shoe to drop with comp grid changes to give them the final push out the door. Based on recent history, you should probably bet on it.

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.