RIABiz

News, Vision & Voice for the Advisory Community

RIABiz

Merrill Lynch unveils changes to broker compensation

LPL, Schwab, TD, and RIAs are poised to reap a windfall as Bank of America says no thanks to the $250,000 set

Author Lisa Shidler December 30, 2011 at 1:44 PM
Admin:
no description available
Fred St. Laurent: The advisor will lose all of those bottom-end customers and Merrill will lose them too.

Ron Edde

Ron Edde

December 30, 2011 — 4:02 PM

Some advisors may argue that this change isn’t that significant, and that it won’t impact their compensation all that much. That may be true, but there is no way to spin this: Merrill Lynch just reduced advisor pay. Read that again. Darnell lied; they ARE “messing” with advisor comp and he KNEW they were going to do it.

I would also submit that there is no certainty, let alone a likelihood, that the other wirehouses will follow suit. The other firms already watched BofA shoot itself in the foot with that idiotic debit card fee debacle, and this has The Bank’s fingerprints all over it.

Fred St Laurent

Fred St Laurent

December 30, 2011 — 10:12 PM

Ron, I agree with you. One thing that I am hearing repeatedly from Merrill Reps: “I am becoming a banker.” they are being asked to sell bank products to their clients. Now this in itself is innocuous but consider this: If the broker resisted the original push to bring their clients into the bank, the offering of some of the many B of A banking products becomes an end run. They suddenly become B of A Customers and now you have a bank desperate for fee income who has a client to call… and they will call. By the way my understanding is that US Trust reps can call any bank customer with more than $3,000,000… oh and the clients with $250 k go to the “greenhouse” now… but I am hearing that this will go to $500k and below soon. Where does this leave the broker? In denial if they stay. They will get by losing the smaller clients because they really should focus on wealthier clients… who will be called by US Trust reps?

Ron Edde

Ron Edde

December 30, 2011 — 11:25 PM

Fred, I am reminded of a time-tested piece of wisdom:

He (BofA) who tries to please everyone, pleases no one. BofA clearly wants to be everything financial to everyone, but that is just not possible. Caught up in all this, as you correctly pointed out, are the Merrill Lynch advisors. They have already hog-tied the U.S. Trust FAs with that outrageous “garden leave” policy, and for the most part, it is having the intended effect. No one should be surprised when the firm, in addition to cutting advisor comp, tries to impose that same policy on the Merrill reps. Remember, it was not that long ago that BofA tried to withdraw Merrill from the Broker Protocol agreement.

Maria Marsala

Maria Marsala

January 1, 2012 — 2:21 AM

A bank is a bank is a bank. It is not a wirehouse. BoA’s culture will prevail and like Reynolds Securities, someday Merrill Lynch’s name will disappear into thin air.


Related Moves

Infamous stockbroker resolves civil suit stemming from violent tirade -- the apparent final chapter in an incident that went viral and forever branded him the 'Fairfield Smoothie Guy'

Broker Jim Iannazzo went all out with high-powered attorneys and slick Las Vegas crisis pr team to limit the damage from his actions, but whether he can ever live down the incident remains to be seen.

September 1, 2022 at 5:11 AM


Mentioned in this article:

Finetooth Consulting
Consulting Firm
Top Executive: Ryan Shanks

Firstgroup Recruiting Solutions, LLC
Recruiter
Top Executive: Frederic St Laurent Jr

Diamond Consultants
Recruiter
Top Executive: Mindy Diamond

FA Match
Consulting Firm, Specialized Breakaway Service, Recruiter
Top Executive: Ryan Shanks



RIABiz Directory

The Industry Sourcebook for RIAs

   |    LISTING


RIABiz Directory sponsored by:

Directory Sponsor Logo