- Merrill is implementing its new advisor training program for its crucial pool of new talent.
- Most trainees are opting into the newly structured program, more than Merrill expected.
- Some have left, and Merrill's overall advisor headcount has declined by around 400 since last quarter.
- See more stories on Insider's business page.
Bank of America's vast wealth management unit is implementing a new structure for the way it trains up financial advisors, its primary pool of new talent. After months of turmoil within the program, a higher number of advisors-in-training than Merrill expected are now electing to continue with the newly shortened program.
Merrill Lynch Wealth Management President Andy Sieg said Wednesday that 92% of roughly 1,000 trainees early in their training opted to continue with the new program Merrill announced in May. Of the wider program, which typically has 3,000 trainees, some 2,000 could complete the 3 ½-year-long program the firm plans to phase out.
"That is well ahead of what our expectations were," Sieg said.
Some 8% of advisor trainees did not accept roles within the new program. The firm reported a drop of around 400 in overall advisor headcount from last quarter, to 19,385. That includes all advisors across Merrill and the private bank; Merrill no longer discloses how many full-fledged wealth advisors it employs.
"That headcount removal, along with a slower hiring over the last several quarters, brought our advisor countdown slightly this quarter overall as we look to the medium- and long-term," Sieg said on a call with reporters.
That the majority of advisor trainees will continue with Merrill's program marks a turning point for one of the world's largest and most storied wealth management firms and the way it is bringing up the next generation of advisors.
Merrill, which has largely stopped recruiting experienced advisors from competitors in recent years and reported a drop of 1,000 advisors from a year ago, relies on its training program for new talent.
The business told financial advisor trainees in August 2020 that they could no longer cold-contact prospective clients as a temporary measure, squashing employee morale and pushing some to feel that they could not expand their practices. The ban was instated as some cold-calling resulted in no-call list violations, Insider first reported.
Merrill shuffled leadership after its former head of training left last fall, and made the ban on cold-calling permanent this spring. It said new trainees would rely heavily on referrals from parent firm Bank of America, the second-largest US bank, to grow wealth management clientele.
Aiming for high success rates out of the new program
Sieg said on Wednesday that the program is pushing for a high 80% graduation rate from its program, far higher than the success rate of roughly 30% he has said is common across the industry. The new training program now takes 18 months, about half its previous length.
The program takes "greater advantage of the technology and the full capabilities of Bank of America to meet clients and prospects where they are," said Sieg, who has run Merrill since 2017 and joined the firm three decades ago.
"We continue to anticipate low single-digit growth in our advisor population annually over the years to come driven in large part by increasing the overall success rate of the next generation of advisors," he said.
As part of Bank of America's second-quarter earnings results released on Wednesday, Merrill reported a record $3.1 trillion in client assets as of June, up 25% from a year prior. The wider wealth management business, which includes the private bank and consumer investments, reported $4.1 trillion in client assets.