Merrill Lynch to launch new adviser training course, ends cold-calling

In keeping with the times, it appears that the practice of cold-calling is out and using social and business networking platforms like LinkedIn is in.

For the past year, Merrill Lynch has steadily hinted at overhauling how it trains new financial advisers, including cutting the retail securities industry’s time-honored tradition of new brokers cold-calling potential clients.

In keeping with the times, it appears that the practice of cold-calling is out at Merrill and using social and business networking platforms like LinkedIn is in. Merrill is announcing its new financial adviser development program today, according to a company spokesperson.

The ban on cold-calling is not new, the spokesperson noted. Merrill Lynch last summer put the kibosh on its army of adviser trainees contacting potential new clients after some violations were noted. Executives at the firm later suggested the sales practice, which is treated like a rite of passage by some financial advisers, would later be reinstated, but that turned out not to be the case.

In April, a senior Merrill Lynch executive who asked not to be named suggested a change in the training program was coming and said that new financial advisers would “use LinkedIn to build and expand networks.” Referrals and leads are the lifeblood of a financial adviser’s business, and for the past few years, Merrill Lynch has been rewarding advisers who bring in a positive, healthy number of net new accounts.

As a result of the Covid-19 pandemic, wealth management trainees at Bank of America and Merrill Lynch were cut off in 2020 and the start of this year from traditional ways of bringing in new business, such as in-person events and meetings, which have been reduced sharply or eliminated altogether across the wealth management industry.

“I think there’s a couple things going on here,” said Danny Sarch, an industry recruiter. “First, cold calling has long been discouraged. Certain people are good at it but it’s a relic from a different era, considering who takes a call from strangers these days and the ‘do not call’ lists are a frustration for everyone.”

“Wealth management and financial advice has been trying to move away from sales to a much more consultative business,” Sarch said. “Cold-calling has been discredited for years.”

“Next, with no cold-calling, the young adviser’s alliance with the bank, Bank of America in Merrill’s case, is closer,” Sarch said. “Merrill Lynch wants advisers to think of the bank as the source of leads and tie wealth management closer to the banking world.”