To maintain competitiveness, Merrill recently tweaked the way it compensates its staff. Advisors will continue to get a percentage increase or decrease based on the number of new households they bring in annually, but now the payout will also be based on a rolling 12-month period—the industry standard.
Bank of America’s Merrill Lynch global wealth and investment-management businesses, which saw a 19% increase in revenue in the third quarter, accounted for $4.5 billion of the Charlotte, North Carolina-based bank’s roughly $23 billion in total revenue for the period. With $3.1 trillion in client balances, Merrill is among the largest wealth-advisory firms in the world, behind UBS and Morgan Stanley.
Retaining and adding advisors is important for Merrill to keep up with rising demand from a growing number of younger wealthy people. Clients under the age of 45 represented 20% of Merrill’s net new households in the third quarter, double the portion five years ago, according to the firm. New customers—along with the stock market’s bounce-back from the early days of Covid-19—helped Merrill increase client account balances.
“There is a bull market for advice,” said Sieg, who keeps a miniature statue of the bull from the Merrill logo on his desk at Bank of America’s New York offices, at One Bryant Park. There’s a “tight correlation between exciting economic growth and overall wealth increases” across the U.S.
Sieg said he believes Merrill’s long history and its backing by Bank of America and the other financial services it offers will help the firm retain a top position within the wealth-management industry.
“Advisors are also realizing there is no platform like ours to serve high-net-worth clients,” he said.
This article was provided by Bloomberg News.