John Thiel: Calming the Merrill Lynch herd

Dec 18, 2011 @ 12:01 am

By Andrew Osterland

When John Thiel took over as head of U.S. Wealth Management for Bank of America Merrill Lynch in April, the 15,000 or so Merrill Lynch financial advisers breathed a collective sigh of relief.

He is one of them, and his appointment was at least some evidence that Merrill Lynch would continue to be led by an adviser rather than a banker.

An accountant by training, Mr. Thiel, 51, started his 22-year career at Merrill Lynch as an adviser in the firm's Tampa, Fla., office. He became a regional director in Illinois for the firm before joining the Private Banking and Investment Group in 2000 and being named head of that group in 2006.

Like all wealth managers, Mr. Thiel and his legions of advisers have their hands full keeping clients calm in a nerve-racking market.

“Our biggest challenge continues to be helping our clients navigate in a very challenging environment,” he said.

Mr. Thiel also has the difficult task of keeping the proud members of the Thundering Herd happy under the ownership of Bank of America Corp. Veteran Merrill Lynch brokers, still resentful of the shotgun marriage that they were forced into during the financial crisis, haven't exactly embraced the integrated financial services strategy being pursued by BofA and its chief executive, Brian Moynihan.

“The Merrill advisers clearly like Thiel a lot, and to the extent that he's driving the bus, [his appointment] is a positive,” said executive recruiter Mindy Diamond. “The question is: Is he really driving the bus?”

Indeed, as pleased as Merrill Lynch advisers were with the appointment of one of their own, they were dismayed by the departure of Mr. Thiel's former boss, Sallie Krawcheck, last summer. Her position as president of global wealth management and investment was eliminated in a reorganization.

Merrill Lynch was folded into the broader consumer products division of BofA, and Mr. Thiel now reports to commercial banker David Darnell.

Recruiters such as Ms. Diamond see Merrill Lynch as the premier wirehouse hunting ground for recruits. Along with the simmering resentment and impatience among the brokers with the trials and tribulations that the bank is going through, the retention packages put in place by BofA three years ago are winding down.

Top Merrill producers such as Harvey Kadden, who recently left for Morgan Stanley Smith Barney LLC, will be getting lucrative offers from competitors in the coming year.

Mr. Thiel takes it in stride.

“It's nothing new. We've always been a target for other firms,” Mr. Thiel said.

“We have the best platform and the most experienced advisers,” he said. “We're the biggest and most productive firm in the business.”

Merrill Lynch actually now has fewer advisers than Morgan Stanley Smith Barney, though it posted $3.43 billion in revenues for the third quarter--5.2% higher than MSSB, and tops among the wirehouses. And Merrill was surpassed by UBS AG in terms of revenues per adviser last quarter , although UBS does not include low-producing trainees in the claculation as Merrill does, said Bank of America Merrill Lynch spokeswoman Selena Morris.

However, Merrill Lynch remains the iconic Wall Street brokerage firm. Its adviser ranks grew by 9% last year and it posted a 17% pretax profit margin in the third quarter.

Merrill Lynch nearly $1.5 trillion in assets.

Mr. Thiel plans to keep the Thundering Herd the leading force in the investment advisory world.

“We're going to give the advisers everything they need to deliver for clients,” he said. “That will always be our focus.”

aosterland@investmentnews.com

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