Relying on trainees, Merrill Lynch boosts adviser headcount in 2017

Questions remain about long-term effectiveness of wirehouse's move away from recruiting experienced brokers

Jan 17, 2018 @ 1:53 pm

By Bruce Kelly

Despite cutting back on recruiting experienced financial advisers, Merrill Lynch increased its adviser headcount by 2% in 2017, adding 333 people for a total of 14,953 at the end of last year, according to Merrill's parent company, Bank of America, which released its fourth quarter earnings Wednesday.

Last May, Merrill Lynch, along with rival Morgan Stanley, said it was reducing its reliance on recruiting experienced advisers and putting renewed focus on training younger advisers and building staff.

Merrill Lynch continues to emphasize training new advisers, with selective hiring of veterans, industry observers noted. One recruiter asked, while such a strategy may boost the number of advisers in the short term, will those young advisers be able to increase revenues substantially in the years ahead?

"Those numbers validate what Merrill's goal was, to de-emphasize experienced adviser recruiting and emphasize training," said Louis Diamond, vice president and senior consultant at Diamond Consultants, an industry recruiter. "It's putting young and new advisers in bank branches. That's the strategy Merrill and Bank of America have committed to. It's working, but still tough to say how effective it will be long-term."

"I'll be curious to see in a year or two how successful those people are," Mr. Diamond said. "Will they still need to recruit experienced advisers with large books of business?"

Merrill Lynch Wealth Management reported fourth quarter total revenue of $3.8 billion, an increase of $236 million, or 6.5%, when compared to the same quarter a year earlier. The increase was driven by higher asset management fees and net interest income, and partially offset by lower transactional revenue, the company said.

Merrill Lynch reported revenue of $15.3 billion for 2017, up from $14.5 billion in 2016.

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