Merrill Lynch hires 475 advisers; revenue off 1.9%

By Andrew Osterland

Oct 23, 2011 @ 12:01 am (Updated 8:15 pm) EST

Bank of America Merrill Lynch hired 475 net new financial advisers in the third quarter, but revenue from the largest business unit of Bank of America Corp.'s global wealth and investment management division fell 1.9% to $3.43 billion.

And while the firm had a record $1.56 billion in fee-based revenue for the quarter, that level may not be seen again in the next few quarters.

The quarter was tumultuous for Merrill, as Sallie Krawcheck, leader of the wealth management division, was ousted as part of a management restructuring at parent BofA. Despite unrelenting bad news from the country's largest bank, Merrill both added to its adviser ranks and attracted $4.5 billion in new long-term assets to the firm.

Spokeswoman Selena Morris, said many of the new advisers are trainees without books of business.

Merrill also hired 31 “financial solutions advisers” — salaried employees who serve self-directed investors in the Merrill Edge financial platform. That, in part, explains the drop in productivity to $854,000 per adviser at the end of last month, from $893,000 per adviser in June.

Revenue from brokerage transactions also was down, however, reflecting lower market activity, according to the company's earnings presentation. Merrill said that it earned record asset management fees for the quarter but did not disclose brokerage revenue separately.

The quarter could be a high-water mark for the fee-based side of the business, though, as fees are charged in arrears on assets at the end of the previous quarter, said Alois Pirker, research director for Aite Group LLC.

Assets in fee-based accounts fell to $617 billion at the end of the third quarter, from $661 billion at the end of June.

Email Andrew Osterland at aosterland@investmentnews.com

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