Bank of America Corp.’s wealth-management business set records last quarter as soaring equity markets made legions of Americans newly rich. With the boom, however, comes intense competition across Wall Street to lure wealthy clients and retain advisors at risk of being poached.
The company’s Merrill Lynch Wealth Management unit reported its highest quarterly revenue ever in the three months through September. But challenges remain: The firm has lost employees who’ve formed their own firms or joined competitors—part of the reason Bank of America’s overall roster of wealth advisors slumped to 18,855 in the third quarter, down 8% from a year earlier.
“This is a very strong war on talent, but this has been a competitive marketplace in wealth management for certainly my whole career, which is three decades in the business,” Andy Sieg, president of Merrill Lynch Wealth Management since 2017, said in a Bloomberg Television interview Friday. “We’ve got a lot of strength to let us battle that war for talent without seeing costs running away from us.”
The demand for advisors comes as banks bolster their business of serving affluent clients. JPMorgan Chase & Co. is boosting compensation for wealth advisors, UBS Group AG is starting a digital wealth manager in the U.S. and Citigroup Inc. is making a big push in the space, including plans to hire some 2,300 staffers in the Asia-Pacific region.
In an attempt to set it apart from competitors, Merrill is focusing on modernizing its business through technology.
“We’re not your father’s brokerage firm,” Sieg, 54, who joined Merrill Lynch in 1992, said in a separate interview with Bloomberg. “We’ve broadened the appeal of our brand through digital, high-tech, high-touch.”
Merrill also is trying to strengthen its employee base by building the next generation of advisors from within. Roles in wealth management are open to employees across the company, including staffers in consumer and global banking and markets, as well as external candidates.
It also revamped a training program this year to help advisors develop leads through other business lines at Bank of America, which took over Merrill Lynch & Co. during the global financial crisis more than a decade ago. Merrill aims for roughly 1,000 new advisor graduates a year. It’s targeting an eventual 80% graduation rate from the program, up from the current industry rate of less than 30%.
‘Not Realistic’
In a bid to hold onto advisors once they’re in place, Merrill is focusing on employees’ careers right through retirement, when they can pass off clients and capture “the full career arc,” Sieg said. In the third quarter, attrition among experienced advisors returned to just under the firm’s average of 4% over the past decade.
“My objective is to have 100% retention among advisors,” but “that’s not realistic,” Sieg said. “It is a very competitive marketplace,” with companies placing a strong “emphasis on recruiting.”