John Thiel, Merrill Lynch's new boss, has put his own stamp on the business with a revamped and leaner management structure. But some wonder if he might be taking on too much responsibility.
Mr. Thiel, head of wealth management at
Bank of America Corp., laid out the new, flatter management structure for the company's U.S. wealth management, private banking and investment groups in an internal memo sent on Sept. 21.
Gone are the three divisions that Merrill's 16 regions used to report to. In turn, the 16 regions were reduced to 11, each to be led by a market executive who will report directly to Mr. Thiel.
The revamp also eliminated a parallel reporting structure previously used by Merrill's high-net worth Private Banking Investment Group.
Mr. Thiel, who took over three weeks ago for his former boss Sallie Krawcheck, spun the change as a “market-driven, client-driven and streamlined” arrangement for the firm.
The reorganization was not surprising.
"Firms reorganize all the time," especially with a new boss, said Mindy Diamond, president of Diamond Consultants LLC, a recruiting firm
"But is it due to cost-cutting?" Ms. Diamond asked. "That's how it's being received" by Merrill brokers who she said are worried about loss of support.
The 11 individuals named as regional market executives are all former advisers, said Ron Edde, a recruiter at the Armstrong Financial Group Inc. That should help "quell a concern" that bank people might be taking over after Ms. Krawcheck left, Mr. Edde said.
Mr. Thiel is also a former adviser.
Still, some observers wonder if Mr. Thiel's new management structure might be too lean. Under the reorg, all 11 regional market executives will be reporting directly to him. That list includes: Brett Bernard, Mid East; Chris Dupuy, Pacific Northwest; Linda Houston, New England; Paul Lambert, Mid-America; Bill Lorenz, Mid-Atlantic; Jeff Markham, Greater Texas; Sabina McCarthy, New York Metro Area; Don Plaus, South Atlantic; Jeff Ransdell, Southeast; Jodi Rolland, Heartland; and Chandler Root, Southwest.
Eleven regional managers are “certainly a lot of direct reports.” said Brad Hintz, a broker analyst at Sanford C. Bernstein & Co. LLC.
“I wonder what Peter Drucker would say?” he said, referring to the influential management consultant who urged managers to meet frequently with those who report to them.
But Merrill Lynch spokeswoman Selena Morris, wrote in an email that "the reorganization provides greater empowerment locally."
Ms. Morris added that the regional leaders are all industry veterans, and have an average of 20 years industry experience.
Indeed, Merrill's former divisional managers typically made “big real estate decisions, big compliance decisions, like a settlement, and big recruiting decisions,” said Danny Sarch, founder of Leitner Sarch Consultants Ltd., a recruiter.
“These are big-money decisions,” he said. “So you either empower lower people to make [decisions], which is not
Bank of America's style, or you put more on [Mr. Thiel's] desk.”
The new Merrill Lynch boss may need a bigger desk.
