Tag Archive for: Merrill Lynch

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

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??

Big Checkbook! Wells Fargo Outbids Rivals For $5.3M Merrill Lynch Team

If you want the biggest recruiting check, mows the time to hitch your wagon to Wells Fargo (see what we did there). The firm remains the most aggressive recruiter in the wealth management universe and it probably isn’t close.

Their stated deal (meaning, if you are a viable candidate or team from ML, MS, or UBS) is 340%. That’s is where the bidding begins. We’ve seen deals reach 375% with upfront checks tipping the scales at a cool 200%. Cha fucking ching!!

This past week a large team in TN migrated from (yes, you guessed it) Merrill Lynch and hit the bid in a big way. As we hear it, the upfront approached 200% and the total deal surpassed 360%. Take a look at their team profile and then let’s run the numbers…

Wells Fargo hired a team that included Will David Coleman, Jeremy Stephens, Justin Webb, and Steven Ragan. The group was annualizing revenue at $5.3 million a year. Based in a Merrill branch in the suburbs of Nashville, TN the group manages over $680 million in client assets.

Now for a little math. $5.3M in annualized revenue at 200% is $10.6M when they walk into the doors of their new Wells Fargo offices. In total their deal could go beyond $19M all in. Not bad for a group of guys that effectively started their careers 10-15 years ago. Like we said, cha-ching!

The financial metrics associated with Wells’ recruiting strategy are fairly simple: roll out deals that are nearly impossible to turn down and outbid the competition by 30-40%.

In spurts, being the biggest deal on the street is working.

Morgan Stanley Exec: “Deals are at all-time highs, we are being very aggressive…”

In several discussions with Morgan Stanley executives last week we got an insider’s look at the firms recruiting priorities and the status of who/how they are recruiting. Some of it was predictable, in a competitive recruiting landscape; while other parts of the conversation were remarkable.

Here is a download of what we heard and how we interpreted it:

“Look, markets and client assets are at all-time highs and as a corollary, deals are at all-time highs. We are willing to be very, very competitive for the right teams in money center cities. We realize they are in high demand so we are doubling down on doing our best to put offers in front of them that make it nearly impossible to say no.”

“That is the current state of recruiting right now. Competitive doesn’t even begin to explain it. Our reputation of tech is playing a meaningful role in winning battles, but let’s be honest here – upfront bonus dollars is what recruits are in the game for – and pressing upwards of 150-175% is the game right now.”

“The most competitive bids? No doubt is Merrill PBIG teams. They want to leave and everyone knows it. They are tired of the BoA bullshit and are shopping. Not window shopping, legit price comparisons. We liken ourselves to Amazon, and we won’t hide from being the biggest firm on the street (in our category). We are perfectly comfortable with the give/take in our pitch.”

Our take…Morgan Stanley is a philosophical choice. It’s one or the other – being able to understand that with scale comes a certain amount of institutional baggage. But that baggage also carries the reality that there isn’t a box that can’t be checked for the biggest and best clients. Ergo, no compromises on the client-side.

The dollars associated with that choice – in the words of a well-known politician “bigly”.

Broke: Merrill Lynch Recruiting Is A Zombie Cartoon

Merrill Lynch, the firm that used to set the entire narrative for the wealth management industry, isn’t even a skeleton of its former self. It has become a zombie. The walking dead. An easy-to-kill, slow-footed organization that doesn’t have a meaningful reason to continue to exist. Zombie.
Overly harsh one might ask?? No, it isn’t. In fact, Merrill Lynch isn’t even called Merrill Lynch anymore. Bank of America thought it was a great idea to rebrand as just ‘Merrill’ – you know, the name of Mel Gibson’s brother in the movie Signs. Yep, that guy can now accurately be equated with the Merrill brand. Washed up.
In just the 8 weeks since the turn of the calendar, the continued acceleration of Merrill teams has migrated to Morgan Stanley, UBS, and Rockefeller. Does anyone want to guess how many recruits Merrill (a division of Bank of America) has signed up in that time? How many have been announced? Nada. Zilch. Zero. 
Merrill Lynch teams are increasingly easy to poach as the pervading attitude is “there really is no reason for me to stick around anymore.” Management turnover, culture destruction, colleagues have bounced – if you are a big team or advisor still at the firm you either hate change as much as I hate asparagus, or you simply aren’t marketable. It’s one or the other.
In a scene from The Walking Dead, rival firms have a massive cache of weapons, and Merrill advisors keep slowly walking in the same direction. Easy targets. “Swing away Merrill, swing away…”

Merrill Lynch Makes More Adjustments To Advisor Comp; Death By A Thousand Cuts

Across the industry, last week’s headlines seemed to downplay next year’s changes to advisor comp at Merrill Lynch. From a stand-alone viewpoint, the articles themselves weren’t wrong or misguided – Bank of America made minimal adjustments to overall comp for advisors and teams that matter.

But that’s not the full story. What’s really happening at Merrill Lynch is wealth management version of ‘death by a thousand cuts’. A nick here, a cut there, a bruise over here, all of them spaced out year over year so as to not paint the picture of a beaten prizefighter the day after a career-changing knockout.

It isn’t a stretch to claim that Morgan Stanley is now the standard in the wealth management ‘wirehouse’ game. When did that happen? Two decades ago nearly anyone that mattered started and spent the first decade of their career at Merrill Lynch. Today, they are nothing more than a line item for Bank of America.

In context, annual changes to account size payouts, new bank product sales quotas, and bifurcated ‘who owns this account’ tiers across different divisions inside the Merrill brand (a reminder that it’s just ‘Merrill’ now, not Merrill Lynch, per BofA changes).

So annual changes to comp may be small and on the edges, in totality, the comp grid itself has been revolutionized over the past decade for the now limping ‘thundering herd’.

It makes you wonder, other than retirement induced malaise, why are large teams still at the firm? Expect another year of headlines littered with Merrill departures.

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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.

Read more

Massive Merrill Team Jumps To First Republic; Phil Scott Group In Washington State Take $2.7B In AUM To New Firm

A massive move occurred in the Pacific Northwest last week. The Phil Scott Group out of Merrill Lynch made the move to First Republic. The numerics surrounding the transaction are eye-popping all around and sent shockwaves through BofA/Merrill in that part of the country.

First, Mr. Scott was a 36 year veteran of Merrill Lynch an absolute ‘thundering herd’ lifer. He joined the firm out of the Naval Academy in 1984 and seemingly never considered leaving. That all changed last week. Chatter in Seattle and the surrounding wealth management organizations was abuzz given the largess of Mr. Scott and his team.

The numbers are just are even bigger than the surprise move: $18M in annual revenue and $2.7B in client assets under management. A huge win for First Republic in the region. Doing a little napkin math – the total deal for the team given the revenue stated above will climb beyond the $60M dollar mark. Wow.

Mr. Scott is a Barron’s ‘Hall of Fame’ advisor and his Barron’s team bio reads as such:

“Phil joined Merrill Lynch in 1984 after graduating from the U.S. Naval Academy with degrees in International Relations and General Engineering. His extended tenure with Merrill Lynch is paralleled by that of his team members, many of whom have collaborated with Mr. Scott for more than 15 years. That continuity and consistency, Phil believes, allows the team to deliver an exceptional client experience.”

Pulling back to 50,000 feet – the narrative continues for Merrill Lynch, as they lose yet another huge producer and capstone in a money center city. As has been occurring for a number of years now, the largest producers are leaving the firm at a clip never before seen at Merrill. Choosing a name like First Republic is of real interest; but maybe more so is the reality that a 36 year veteran of Merrill finally decided the firm was no longer his home.


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

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.


Stifel Recruiting Rebounds

After the departure of their national recruiting head, John Pierce, Stifel recruiting took a bit of a pause. As they circled the wagons they remained engaged with advisors that had been in the pipeline before Mr. Pierce’s departure and the fruits of those efforts have finally found their way to the firm. Via On Wall Street

“The largest of Stifel’s latest recruits is an ex-Merrill Lynch team that managed $935 million. It is composed of advisors Blase Sparma, Stephen Long Jr., Brad Ripplemeyer, and Hampton Ballard. They made the move last week and will staff a new Stifel office in Venice, Florida.”

“Sparma and Long had been at Merrill Lynch since starting their careers in 2000 and 2004, respectively, according to FINRA BrokerCheck records. Ripplemeyer began his advisory career at Smith Barney in 2000, moving to Merrill in 2012. Ballard has spent the entirety of his four-year career at Merrill.”

All in all, Stifel brought in $1.5B in client assets via their recruiting haul, adding several other advisors and teams to go along with the flagship group from Merrill Lynch.

Over the past four years, Stifel has feasted on Merrill Lynch’s legacy teams and advisors. This group adds to that batch of former Merrill Lynch faculty that now call Stifel home.

Beyond Merrill Lynch, Stifel also landed a sizable grouping of Wells Fargo talent across the country. Interestingly enough Wells Fargo has a sizable presence in St. Louis alongside Stifel – so a bit of hand to hand combat on the recruiting front.

Whether or not Stifel can keep up the pace that is set in 2018 and 2019 is yet to be seen, but $1.5B in recruited assets is a great start.