Brooke’s note: What happens at Bank of America matters to RIAs. It owns both Merrill Lynch and US Trust and registered investment advisors [implicitly or explicitly] compete every day for the business of high net worth investors against brokers and advisors operating under these brands. Bank of America has millions of banking customers and thousands of them are high net worth investors who are either unadvised or under-advised. Merrill Lynch is also one of the most fertile grounds for recruiting breakaways into the RIA realm. As evidenced by its low stock price, Bank of America is still a company facing overwhelming challenges. Its selection of a CEO offers a small window into how the Charlotte, N.C., bank will set about facing those challenges and where financial advisors fit into its plans.

In electing Brian Moynihan as the new CEO of Bank of America, the company’s board of directors acted and spoke like a hung jury ordered to make its best decision.

This reluctant approach gives the 50-year-old New Englander [he still keeps his home in Wellesley, Mass., according to the Boston Herald] a weak mandate as he takes the reins of the Charlotte, N.C.-based leviathan, says one ex-Merrill Lynch executive who asked not to be named.

“Early reaction has been very bad [to his election], mostly in terms of selection process,” he says. “They could have given him the job in September, and to shop it for months does nothing to add to his credibility. 'They ended up with the 12th choice for the job’, as one friend put it.”

Indeed, Dr. Walter E. Massey, chairman of Bank of America cites external forces and expediency as key factors in the board’s decision to pick Moynihan.

“While we considered external candidates, the Board decided after listening to shareholders, regulators and others that Brian’s experience was commensurate with or better than any of those candidates, and he offered the advantage of a smooth transition,” he says. “Bank of America has a talented team, and one of our principal jobs as directors is to support that team as it goes about creating value for all of our constituencies.”

Cryptically

For his part, Moynihan speaks somewhat cryptically about the direction he intends to satisfy multiple constituencies under the BoA umbrella.

“We think of this not as changing the business model, but changing the way we do business,” he says in a prepared statement.. “We are committed to fairness and transparency as we seek to provide the best financial products and services in the world.”

Despite his reassurances against big changes, Moynihan will likely have to wield an ax from time to time, according to an observer.

“Most of the employees are sure that the firm will be quietly broken up over the next few years,” he says . “[They see BoA as] “too big to run’” in its current configuration.

In press reports, some observers said that Moynihan’s history bodes well for Merrill Lynch. He is presumed to have a comfort level with financial advisors because he oversaw wealth management at Bank of America from 2007 to 2009 and during his tenure at FleetBoston earlier in his career.

However, in its lengthy press release announcing Moynihan’s appointment, BoA and Moynihan did not once mention its mega-subsidiary, Merrill Lynch.

BoA originally announced its acquisition price of Merrill Lynch at $50 billion in stock. That amount fell with the price of its shares to less than half that amount at the time of closing. Bank of America’s current market capitalization is about $128 billion.

Short lists

Bank of America also — more predictably — left out of the press release Sallie Krawcheck who heads Merrill Lynch for BoA. She was once mentioned on short lists as a potential successor to Lewis.

Today’s decision may impact on her career because Moynihan may not create a vacancy for a long time, says the executive.

“A young CEO does not play in her favor,” he says. “I suspect she will have trouble moving up in that organization under this regime.”

Moynihan is viewed as having as much wealth management experience as Krawcheck after having overseen investment management and wealth management with Fleet Boston.

“Nobody seems to be paying much attention to Krawcheck at this point,” the source adds.

As president of global corporate and investment banking, Moynihan showed a willingness to favor a big-bank approach to wealth management over a more clubby Wall Street alternative.

Stared down

He famously stared down a challenge from Peter Scaturro, former CEO of US Trust, after Bank of America acquired it from The Charles Schwab Corp. in 2007. Scaturro favored keeping it autonomous and Moynihan was determined to integrate it more with the larger organization. Scaturro left.

Moynihan, who was named to his current role earlier this year, joined FleetBoston Financial in 1993 after a 9-year legal career in Providence, R.I. He subsequently rose to senior positions at that company. Fleet was acquired by Bank of America in 2004.

From 2007 to 2009, Moynihan served as president of BoA’s Global Corporate and Investment Banking, leading a business delivering a wide range of financial services products and services to more than 140,000 clients around the world.

He is a Brown University graduate.