Merrill heats up summer hiring market with advisers managing $533M

The additions to the firm reflect new hiring activity, recruiters say

Sep 4, 2013 @ 3:24 pm

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Bank of America Merrill Lynch has landed four advisers overseeing a combined $533 million, the latest in a spate of summer hires among wirehouse firms that could point to new hiring momentum, according to recruiters.

Merrill Lynch's hires, who hail from rival wirehouses Morgan Stanley Wealth Management and Wells Fargo & Co., moved to the firm in August.

They include Charles Phelps, with $201.8 million in assets under management, who joined Merrill's San Mateo, Calif., office from Morgan Stanley. Also, from Morgan Stanley, Abtin Zarrabi joined Merrill's Pinnacle Peak, Ariz., office with $191.9 million in assets under management and $1 million in production.

Robert Bezzone and Joseph Marotta joined Merrill in Morristown, N.J., from Wells Fargo with $139.5 million in assets under management and $1.3 million in production.

The hires come as the four wirehouses saw increased adviser movement during the summer months, shaking up what has been anemic turnover in the wealth management industry.

“We've entered a perfect storm for adviser movement,” said Mindy Diamond, president of Diamond Consultants LLC.

Diamond said she saw a drag on adviser movement during 2012 and through most of 2013, but she believes this resistance created “pent-up demand,” resulting in a more turnover in the recent months.

Now, she said, there are four forces pushing advisers to consider jumping ship.

First, the wirehouse incentive packages are at a high-water mark. Second, the shadow cast by Finra's consideration of the broker disclosure rule is creating concerns about the regulatory environment. Third, retention packages are down from their peak, and with every day that goes by, advisers are amortizing more of the money from those packages. And fourth, bank parents to wealth management arms are prone to be overly controlling of their advisers while also creating bureaucratic hiccups, which yields frustration.

“This creates a dissonance,” Ms. Diamond said. “Advisers want to be treated like entrepreneurs with a large degree of flexibility and freedom. The frustration comes from a lack of or loss of control.”

“In the last couple of months there's been more movement,” she said. “And a lot of that movement has been from the wirehouses to the independent space.”

Bill Willis, president and chief executive of financial services recruiting firm Willis Consulting Inc., said turnover at the wirehouses is still “encumbered by retention deals,” a product of the post-2008 climate.

“2013 remains an okay year for recruiting but not a banner year,” Mr. Willis said.

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