With the bulk of Merrill Lynch financial advisers on their way to their best year ever producing revenues, management has yet again adopted an outlook on compensation and pay that could be summed up with the saying, "If it ain't broke, why fix it?"
Merrill said on Tuesday it would make no changes to its so-called "growth grid," which it introduced four years ago, after a stagnant period, to goose its 18,500 financial advisers to chase new clients and households.
As the broad market continues to hit fresh highs, 86% of Merrill's financial advisers are on track to have their best year ever, according to the company.
The company also said it was making an important structural or procedural change to how advisers are paid: Merrill Lynch financial advisers' percentage rate of pay — in the neighborhood of 40 cents per dollar of revenue that advisers create — will be based on the advisers' prior 12 months of sales, known in the industry as the trailing 12.
In the past, advisers were paid a percentage of revenue in the current year that was based on sales and revenues from the prior calendar year. The distinction may seem trivial on the surface, with the percentage of pay simply shifting from a calculation based on a current revenue to past.
But the change brings Merrill Lynch in line with most of its competitors, a senior Merrill Lynch executive pointed out.
"Compensation will now be calculated based on an adviser’s previous 12 months of production," said the executive, who was speaking anonymously. "After each month, the most recent 12 months of production will determine that month’s grid payout."
"Grid" is industry shorthand for the complex structure of advisers’ compensation at large institutions that typically have many parts.
“Our goal is to keep the compensation plan simple and stable” so advisers can continue the momentum they have, the executive said.
Merrill Lynch did not touch the growth grid pay plan last year either, but advisers lost any compensation for small accounts (those with $250,000 or less).
From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.
Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.
“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.
Sellers shift focus: It's not about succession anymore.
Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
