After trimming the ranks of its brokerage force, Bank of America Corp. apparently wants to build up its force again — this time from the ground up.
After trimming the ranks of its brokerage force, Bank of America Corp. apparently wants to build up its force again — this time from the ground up.
BofA plans to hire as many as 2,000 brokers in its global wealth management division over the next year, mostly in the U.S., the Financial Times reported today, citing unnamed sources. The company wants to train new brokers, the sources said, rather than competing in the costly and cutthroat market for established individuals and teams.
The bank has about 17 million “mass-affluent” customers that likely would qualify for wealth management services.
In a press presentation in January, Sallie Krawcheck, president of global wealth and investment management at BofA, said that her company will indeed do some hiring and training, but not at “an extremely high rate,” she said.
It turns out that Ms. Krawcheck must have meant that in a relative sense.
The combined businesses of BofA and Merrill Lynch & Co. Inc. formed one of the largest wealth management businesses in the world, with more than $2 trillion in total client assets and about 15,000 financial advisers at the end of last year. That total was down 11% from the roughly 18,000 the bank had at the start of last year, when the two companies finalized the merger.
Selena Morris, a spokeswoman for BofA, could not outright confirm the FT story, but in an e-mail, she noted that "the bulk of our investments in our business are in capabilities for clients and existing advisers. In addition, we look to add quality advisers and bankers, in particular through our training program.”
Alois Pirker, research director at Aite Group LLC, said that today's announcement shows how important headcount is in the brokerage business. Merrill's manpower, he noted, was recently overtaken by the combined broker force of Morgan Stanley and Citi's Smith Barney.
Mr. Pirker added that hiring more brokers to appeal to BofA's wealthier retail customers is a smart move for the bank — although it would have made more sense to try to hang on to more of the brokers it lost. Still, “the combo only makes sense if you can leverage each other's franchise, and to do that, you have to reach across to retail banking,” he said.
Ultimately, Mr. Pirker said, that's where the opportunity for BofA lies. “If you don't leverage the opportunity, you might as well split [BofA and Merrill] up again.”
