Merrill Lynch growth strategy helping advisers reach record productivity

New client acquisitions up and 60% of advisers are having their best year ever

Oct 16, 2019 @ 1:47 pm

By Ryan W. Neal

Merrill Lynch continues to grow revenue through new client acquisition and cross-selling Bank of America products, while also doing a better job with adviser retention and production, according to the firm.

Following Bank of America's quarterly earnings report on Wednesday morning, a Merrill Lynch executive said the firm increased its total adviser head count by 1% year-over-year during the third quarter.

The firm wouldn't disclose how much of its total number of financial advisers, 17,508, is made up of the consumer banking segment or new hires for the Merrill Guided Investing digital advice offering, but the company said the number of advisers working inside Merrill Lynch offices remained relatively flat from a year ago.

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Merrill Lynch had been losing advisers early this year, with some blaming the recent shift in Merrill's pay plan focused on encouraging new wealthy household sign-ups and selling more Bank of America products to existing clients.

That firm strategy, which sought growth, appears to be working.

The firm is seeing all-time highs in client acquisition, grossing 49,300 new households so far in 2019. About 13% of new client referrals come from other areas of the Bank of America business, primarily from the consumer bank.

About 53% of Merrill Lynch clients are now using a Bank of America lending or deposit product, a figure the company said is steadily increasing quarter over quarter.

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"In addition to our focus on acquiring new households, we're also focused on more comprehensively serving our existing clients," the Merrill Lynch executive, who asked to not be named, said in a call with reporters.

The strategy is also paying off for many Merrill Lynch advisers. In terms of commission revenues, 70% of Merrill advisers have higher annual production this year than in 2018, and 60% of advisers are having the best year of their careers.

"We're seeing slightly more financial advisers in a position to receive a benefit from our growth grid than at the same time last year," despite increasing targets, the executive said.

The executive reiterated that Merrill doesn't plan to make major changes to its compensation plan in 2020.


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