A Merrill Lynch trainee shares what it's really like to be part of the firm's revamped, more RIA-like training program

Following a scathing condemnation of the program in reaction to a recent story, another trainee chimes in with a more three-dimensional report

Thursday 12.13.12 by Anonymous Merrill Lynch trainee

Brooke’s Note: It’s not every day that we have someone employed by Merrill Lynch willing to share thoughts. We are pleased to convey them to our readers because this person not only has observations that give a feel for what’s going on there but shows the many changes that are taking place in the wirehouse world — and perhaps particularly at Merrill Lynch. Two huge trends captured by the Merrill Lynch training program, hence this article, are the RIA-ization of advice and the development of new talent in an industry that is short of it. More subtle trends would include the fact that Merrill Lynch trainees, at least this one, are (as you’ll see) quite conversant about the RIA business — and the fact that they want to be part of the so-called RIA discussion, even if there is still a lingering fear that it could lead to trouble if it’s done too openly.

In November, RIABiz published a story that caught the industry’s attention detailing how Merrill Lynch has overhauled its longtime training program and how it is now teaching new advisors to be more like RIAs. See: Merrill Lynch makes bold moves to train new recruits for an RIA-centric future.

The story garnered some strong reader reaction. Some in the RIA arena were quite positive about Merrill’s new and others were stunned that Merrill is offering CFP courses and other financial planning techniques. There were certainly skeptics who believed that Merrill is serving the same type of Kool-Aid — just in a nicer pitcher. The strongest reaction came in the form of remark posted at the end of the story from someone calling himself Scott T. Here’s what he wrote:

This entire article is a barefaced lie. The training program at Merrill Lynch is an ill conceived, poorly managed farce. The entire program is designed to make recruits fail and NOT succeed. They give the recruits ridiculous goals to meet with absolutely no support. The worst part is that the “trainers” are people who were never successful in the business to begin with. Couple that with the fact that the ultimate decision on who stays and who gets fired lies with the branch managers who really have no desire or ability to train people themselves. The whole thing is a recipe for failure. See: Is Merrill Lynch taking its more RIA-like training program another step forward with Racquel Oden’s promotion?.

A voice from inside

Immediately following Scott T.'s comments we asked him to e-mail us with more insight and perspective. We didn’t hear back from him. Recently, however, another Merrill trainee, reacting to the content and tone of that comment, e-mailed us and offered the most thoughtful account of the program we’ve yet read. We agreed to not use his name and to be careful about releasing any personal details about him. He did share this about himself: “I don’t have family in this business. I’m in a market geographically that I’m not native to and therefore had no network to start with,” he said in an exchange of e-mails from his personal account. He also told us that before joining the program, he had been in another industry not related to sales. He says he interviewed with several different wirehouse and advisory firms including Edward Jones, Ameriprise, Northwestern Mutual and Smith Barney. Merrill was the winner because he felt the firm had the most extensive training, the best pay structure, and he also liked the fact that the firm was willing to pay trainees a salary for three-year duration of the program._

The following comments are directly from him.

A trainee’s tale

I’m in the middle of the training program now at Merrill and I can probably shed some light on the program from an insider’s perspective without divulging any non-public company information.

Unfortunately, while the program has improved substantially over the last two years, there was a time when I couldn’t wholeheartedly disagree with comments about the program being “ill managed” as referenced in the comment above.

However, I simply can’t stand to see Merrill’s training program so naively misrepresented.

Anyone who’s had more than one or two jobs at a large corporation should understand that their employer will have at least some delivery issues with employee training and information. I think it’s a natural cause of a large organization. Whether you’re an accountant, receptionist, or financial adviser — Merrill is no different. However, the tools to be successful in the financial services business are available to anyone who is willing to implement them and Merrill is constantly improving on those tools.

No excuse for failure

Even if the trainee’s branch manager or mentors don’t spend the amount of time with a new trainee that someone thinks they deserve, that shouldn’t be an excuse for someone to fail in the program. The notion that some people believe that this program is designed to make recruits fail and not succeed is a bold statement, but it’s entirely false.

I don’t know any person or company, no matter how intellectually challenged they might be, who’s willing to spend $250 million per year on a program “designed to make recruits fail.”

I’m halfway through the program in a satellite office. So I probably don’t get the same kind of attention the larger office trainees get. I personally like it that way though. I started with another trainee who was let go earlier this year because he couldn’t bring in the assets he needed to reach his production goals.

He was a great guy and he knew a lot, but at the end of the day, he didn’t take the initiative to complete the daily prospecting activity that we’re encouraged to do while in the program. So he failed.

We were all sad to see him go because we liked him, but we weren’t surprised. It wasn’t a good fit for him and he wasn’t willing to put in the effort to be successful. That’s what it really boils down to. Merrill couldn’t have known that about him ahead of time, and so they took a huge financial risk to bring him on board and it didn’t work out.

Down to you

My mentor — who was responsible for this former trainee as well — has been incredibly successful in this business for decades at Merrill Lynch and other wirehouses. That being said, I think I’ve met with about five times in two years, but that doesn’t bother me because I haven’t asked for more. He would meet with me more if I asked him to.

It would be unfortunate for a new trainee to be paired up with a mentor who is not already a successful adviser. I can’t say it couldn’t happen, but I haven’t personally seen it. If there is someone who fails in the program, it’s sad, but I’m confident that if they asked for help, they’d get it. Every time, I’ve asked for help, I’ve received it. See: Sallie Krawcheck clues in green advisors about choosing that all-important first gig.

I’ll be the first person to tell you that this is not an easy program. Anyone who’s successful in the financial advice business, whether at Merrill or any other firm, knows that at the end of the day you can’t put their failures on anyone else’s shoulders but on your own.

Those who realize that early on and act like it, have a much better chance at success in this business.

I know that if I’m going to fail at Merrill, it’s going to be my fault. Not the company’s. Company executives such as Dwight Mathis who are heading this program are obviously cheerleading for the company and it is no surprise that he’s going to present the most positive picture of the program. See: RIAs need to step it up in this market turmoil – or pay the consequences.

Different realities

I don’t think there was anything Mathis said in the November article that is blatantly untrue about the program. Maybe he’s just a little bit “over-positive” when giving opinions about the program and what it will do for graduating advisors in the future, but that’s his opinion and he’s entitled to it.

The detractors and naysayers are on the other end of the spectrum. The reality lies somewhere in the middle and it’s going to be a different reality for every person in the program depending on what they make of it.

The changes being made to the program are good for the future of the advisors who choose to implement and apply the enhancements to their businesses. I have several friends in the independent and RIA space, so I know how they run their businesses and how they take care of their clients from a fiduciary position. Even they are amazed at how far Merrill’s training program has come in embracing a service level and responsibility level. See: Debate continues: Fiduciary standard no panacea.

Swimming, not sinking

Simply living up to the fiduciary standard isn’t going to automatically turn someone into a successful advisor, though. You can’t avoid the reality that every advisor faces. You still have to get in front of enough qualified prospects who know what solutions you offer and how you can help them, and then deliver on those solutions. See: Merrill Lynch unveils changes to broker compensation.

I’m a testament to the positive changes they are making to the training program. For example, I’m almost a full year ahead of my production goals. I don’t have family in this business. I’m in a market geographically that I’m not native to and therefore had no network to start with. My wife and I moved to the area just to take this position and we arrived only days before my start date.

I’m not teamed up with any other advisors yet, so all my production has been for the most part from my own efforts. The real kicker though is that I’m much younger than the average age of my clients. How do you think they like that — taking financial advice from someone the same age as their children or grandchildren? But it works and we have great working relationships and friendships where we respect each other.

I’m not writing this to toot my own horn. My point is to simply say that it’s possible for anyone to be successful here who wants it bad enough. I’ve found this company to be a great place to work.

Dwight Mathis

Merrill Lynch | CFP Board of Standards