Merrill doubles down on hiring early career brokers

February 10, 2022

If you want to get a glimpse of Merrill Lynch’s future sales force, take a look at who they’re hiring.

Merrill, which has moved away from the costly practice of recruiting veteran brokers over the past five years, is looking to hiring early-career brokers from non-traditional backgrounds, a strategy that recruiters say bears its fruits with a more diverse and adaptable roster that will be more open to banking, technology adoption and other key areas for the Bank of America subsidiary.

New candidates join Merrill’s Accelerated Growth Program, which pays a five-year guaranteed salary and targets brokers who typically have between two and 12 years of experience. This contrasts with multimillion-dollar producers frequently targeted with high bounties by Merrill’s rivals.

“Merrill Lynch, like every company in the industry, realized they were losing their 50-year-old producers and quickly paid a small fortune to replace them with someone else’s 50-year-old producer. “said industry recruiter Phil Waxelbaum. “At the end of the day, age looks alike, books look alike, and you weren’t moving the business forward.”

“The charm of the AGP program is that you get reasonably proven young advisors and you dramatically change your demographics,” said Los Angeles-based Waxelbaum.

In a testament to Merrill’s apparent satisfaction with the program, he intends to increase AGP recruitment this year above the typical 200 a year who have joined over the past three years.

“We expect the number of advisers hired through this program to increase in 2022 compared to previous years,” a senior executive said last month in a conversation with reporters.

Merrill added 98 advisors through AGP in 2018, its first full year, 221 in 2019, and about the same number in 2021—although less than the 250 to 300 he hired before instituting a hiring freeze on experienced brokers from other firms in 2017.

A Merrill spokeswoman declined to discuss specific 2022 hiring or retention goals so far for hires in the program.

The company has increased pressure this year on its roughly 105 market executives to help spur that growth by gearing their “scorecards” — the goals that determine their annual bonus — more heavily towards recruiting, according to a former executive at the company. Marlet. It also offered relatively high referral fees of up to $25,000 per placement to recruiters, according to Waxelbaum, who said he did not place referral candidates in AGP.

JSuccessful hires often come from outside, even the typical Merrill pool, and come from credit unions, community banks, consumer banks, insurance companies, and some large fund managers such as Fidelity Investments, according to a review of local managers’ job postings on LinkedIn.

A January hire from AGP in Smithville, New York, had been a wealth relations manager at Citi and registered as a broker for five years, according to LinkedIn and BrokerCheck records.

Another, who joined New Haven, Connecticut, in January, came from institutional brokerage Infinex Investments. A third who joined Wayzata, Minnesota, in November had been an adviser at JP Morgan Private Bank, and another joined fund manager Euro Pacific Capital in October in Stamford, Connecticut, according to LinkedIn.

JApplicants must have “talked to clients about investments and banking products,” according to Rick Rummage, a recruiter in Virginia, who said he has referred AGP applicants. The threshold is generally for applicants to prove that at least $15 million in assets will move with them, Rummage said.

Merrill even considers for the program advisers at registered investment advisory firms who have not yet obtained their brokerage license and do so after being hired, according to another recruiter.

“Merrill Lynch hires moldable newcomers,” said Mark Elzweig, a New York-based recruiter.

The strategy responds to the “responsible growth” mantra of Merrill’s parent company, Bank of America, which has a tight focus on spending, and the program’s salary structure has helped to shave hundreds of millions of dollars in initial loans Merrill’s balance sheet.

“For seasoned hires, companies started giving out these huge checks years ago, and it was very expensive,” Rummage said. “And for some people that they would bring in, they wouldn’t be as successful as they were in the previous company. And that was a bad investment.

It also merges with the company’s shift last year to no longer hire most of its interns from outside the company, but instead leverage internal roles at Bank of America and its consumer bank Merrill. Edge, a strategy that executives also touted as better for diversity.

The flip side is that Merrill has seen a lot of exits from his veteran ranks in the meantime, including sentenced to life and even mid-career newcomers who have jumped to other wirehouses citing less pressure to sell banking products or meet growth targets.

“Merrill is leaking like a sieve in the proven 40-60 grower category,” Waxelbaum said.

Merrill, which last year introduced a eight week program to address complaints from brokers about various bureaucratic hurdles, said attrition fell below an all-time average of 4% in the fourth quarter after exceeding 5% in the first half of 2021.

Bank of America’s advisor roster shrank 6.2% year-on-year to 18,846 in Q4 2021, including the Merrill Master Franchise and several thousand US-based Merrill Edge private bankers and advisors. consumer banks.

Bank of America chief executive Brian Moynhian said last month that he expects numbers to stabilize with the ramp-up of new training programs.