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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?

Merrill Is Using Band-Aids To Cover Dam Breaks; Playing Games With Data And Client Retention Teams

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

BIGGEST LOSERS! The Biggest Names In Banking And Wealth Management Are Getting Crushed

You would think that name recognition and brand value would still hold some sort of sway in this industry. The numbers tell a different story altogether.

The biggest losers when it comes to high-level talent in wealth management are some of the biggest names banking and wealth management has ever seen: J. P. Morgan, Merrill Lynch, and Morgan Stanley. All of them are taking historic talent losses and client assets are following them out the back door.

But it isn’t all about the headline. Each of those firms is ‘losing’ for very different reasons. Let’s deconstruct the dynamics of each firm.

1. J. P. Morgan – compensation and culture are the big problem here. UBS has decided to exploit those pain points for headliner Managing Directors across the country at JPM. It has worked flawlessly. Yes, recruiting deals and ongoing compensation are leading the conversation; but culture and JPM leadership being completely unable to stem the tide is a bigger issue. Outlook – systemic issues with no end in sight.

2. Merrill Lynch – a slow bleed connected to a cancerous host that is Bank of America. They changed the name to ‘Merrill’ and loaded up advisors with bank products. Every meaningful team that remains at ML is either in discussions to leave or has signed retirement deal paperwork and grinning and bearing it. Outlook – the thundering herd has been slaughtered.

3. Morgan Stanley – this story is very different than the two above. MS attrition is just that; a function of industry churn at the biggest firm on the street. Taking a closer look,
Morgan Stanley has recruited just as many teams and client assets as they’ve lost so far this year. This isn’t a culture problem or a management problem; rather an industry problem. Outlook – current talent drain will slow.

These firms are as high profile as they come and it’s a great study in culture. The way they are responding to the talent losses is very, very telling. BofA/Merrill just doesn’t seem to care, which projects institutional malaise and that the division is not integral to the larger entities’ success. JPM has no idea how to deal with what is going on at the Private Bank; which proves institutional arrogance (and incompetence). Morgan Stanley is dealing with losses by aggressively recruiting from its competitors, proving that the current trend at that firm will subside.

Three biggest losers, three different narratives, three different outcomes.

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

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

Merrill Lynch Reveals How They Are Fudging The Numbers On Headcount; Replacement Rookies Being Trained As LinkedIn Experts

What a delight it must be to work at Merrill Lynch. Not only do they hire 3,000 rookie brokers a year, but BofA also does their level best to attach one or two of those new trainees to your team, ensuring an extra ‘tether’ keeping you at the firm.

It hasn’t worked. Merrill Lynch has led the list of client asset losses versus its peers up and down the wealth management tiers for more than five years. Every week a new advisor/team leaves the firm for greener pastures. Those that leave (and we’ve done the numbers) are averaging more than $1.7M in annual production and $417M in client assets (and an average of an 18-year tenure at the firm as well).

So the largest share of departures is coming from the top 10% of the workforce at Merrill. The best and the brightest continue to leave.

So what has Andy Seig and BofA/Merrill decided to do? They just told us: hire a massive flock of rookies each year and restrict them to sending LinkedIn direct messages to potential targets. Genius!! Because everyone loves getting unsolicited LinkedIn DM’s.Via Yahoo Finance:

“Merrill Lynch Wealth Management is revamping its training program for 3,000 fresh-faced brokers, including placing a ban on cold calling and expanding the initiative’s accessibility to attract more diverse talent.”

“Participants will be directed to use internal referrals or LinkedIn messages instead of cold calls, executives said on a conference call discussing the changes. The length of the program will be cut in half, from three years to 18 months, with a goal of graduating 1,000 new advisers a year within the next few years, according to Andy Sieg, president of Merrill Lynch Wealth Management. One of the goals of the changes is to reach an 80% graduation rate, compared with a historical industry average of less than 30%.”So to boil that down for you: Merrill is hemorrhaging their best talent and billions in client assets and replacing it with 23-25-year-old trainees being told to send LinkedIn messages. Seriously, LOL!

We continue to wonder, day after day, why do teams and advisors of scale stay at Merrill. It makes no sense other than complacency and the ‘boiled frog’ theory. What a shame.

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.

Janney Lassos Big Bull – Billion Dollar Merrill Team Bolts For Janney In Maryland

Janney seems to be executing its own Merrill Lynch ‘blitzkrieg’ at the moment, following in the footsteps of Stifel, First Republic, and Rockefeller over the past couple of years. The firm has landed three large teams from Merrill in the past few months, and last week landed the biggest of the bunch.

Merrill Lynch mainstays claiming $1.35 billion in client assets in Towson, Maryland, bolted Merrill on Friday for Janney; a release stated from Janney on Friday. Andrew Meredith and Kevin Lindung jumped after having spent their entire 23-year careers with the BofA division. The team includes client associate Scott Kelly, claims $3 million in annual revenue per a source at Janney.

Janney has been a comfortable landing spot for longer tenured wirehouse teams in the past few years. While Janney hasn’t executed a large scale ‘re-positioning’ ala Stifel, they have been successful in pushing a deal that can stretch up to 250%, with upfront payments up to 180%. Those numbers, associated with an ‘old school’ culture, free of bank interference, continues to resonate in a ‘steady as she goes’ recruiting philosophy for Janney.

Meanwhile, Merrill did a bang up job (lol) hiring a single Citi Private Banker in San Francisco. Nobody can figure out how much business he does or what kind of assets he manages. He’s currently on garden leave, so we won’t get any of those answers any time soon.

But, you know, Merrill did tell us that they’d be announcing some new recruiting wins that would prove itself to be the clear winner in the ‘HNW and UHNW advisor platform of choice’ space. As far as we can tell, this is the second recruit announcement of the year for Merrill.

**for reference – 37 total advisors (based on media reports) of scale have left Merrill so far in 2021. Good job guys, good job.

Lies, Damn Lies, And Statistics – Merrill Claims They’ve Been Recruiting All Along, Also Claim Headcount Only Down 3%

In what looks to be a weak and feeble attempt to cover up the industry’s worst recruiting and retention record over the past few years, an unidentified Merrill exec claimed that the firm is jumping back into recruiting. That claim was then quickly followed by a statement that they never stopped recruiting – and then everyone laughed.

The quote that made the rounds in the media late last week intimated that Merrill would be making a ‘few hires’ this quarter and the next. The source attempted to make the giant leap that a ‘few hires’ in the next two quarters would signal that Merrill was the clear choice for advisors who serve HNW and UHNW clients.

Why did this source feel compelled to make such asinine claims? Merrill has been getting their teeth kicked in on the recruiting trail for the last five years. We did a little research, and check this out, 7 out of every 10 teams that have moved in the past 5 years that claim annual revenue better than $3M have left BofA/Merrill and went to a new firm.

Nobody believes that Merrill is about to score a bunch of noteworthy teams from rivals UBS, Morgan Stanley, or Wells Fargo (okay maybe Wells but that’s an article for another day). Any large team associated with a move and Merrill Lynch has been an exit, plain and simple. In 2018-2019, Stifel absolutely feasted on Merrill teams. Now, Rockefeller is doing the same, along with First Republic and indie firms.

All this amounts to is a misdirection play to take the industry’s eyes off the fact that Merrill’s real attrition rate with legacy advisors (not new bank hires and Merrill Edge) is closer to 10% rather than 3%. Give me a break. The smoke and mirrors are lame and nobody believes this ‘anonymous’ executive.

Our best guess is this – Merrill will probably announce a big private bank hire or two in the next couple of months. J.P. Morgan?? Maybe. Or possibly Goldman Sachs. That will serve as cover for this leak claiming that they are back in the recruiting game. **In fact that’s the only ‘team’ hire Merrill has made this year that we can find; a JPM PB hire in Texas.

Any team worth a damn in the industry wouldn’t dare go to BofA/Merrill. Why sign on to a small division of a bank that sees you as nothing more than a distribution center for loans and trust products?

Merrill would’ve done well to simply keeps its mouth shut. Now, we will be watching for their recruiting to come roaring back **rolls eyes**.