Merrill advisers increasing — and so is their production

Merrill advisers increasing — and so is their production
Head count on the rise; average annualized revenue now at $915K
JUL 19, 2012
The choppy investment markets took their toll on the second-quarter financials of Merrill Lynch Global Wealth Management. Client assets under management were down $39 billion and revenue was off $45 million from the first quarter, although adviser productivity ticked up 1%. Merrill parent Bank of America Corp. reported earnings this morning, and the market wasn't thrilled with the numbers. Despite favorable comparisons with second-quarter 2011 — when the bank took more than $18 billion in charges related primarily to mortgage issues — BofA missed revenue expectations, and its stock was more than 3% lower in afternoon trading. “In a challenging global economy, we still see opportunities to do more with our customers and clients,” Brian Moynihan, chief executive officer of Bank of America, said in a press release. Wealth and investment management revenue fell by nearly 4% from the same quarter last year. The bank attributed the decline to low interest rates and thinner transaction volumes. Profits in those operations were up 6%, however, because of lower expenses and credit-loss provisions. Revenue at Merrill, the biggest part of BofA's wealth management business, dipped 1% from last quarter and 3.5% from the second quarter of last year. The bank does not disclose profitability for Merrill separately from U.S. Trust and other parts of the wealth management business. During the second quarter, Merrill most likely added to its lead over Morgan Stanley Smith Barney in the number of financial advisers. Merrill ended the period with 17,534 advisers, including trainees and financial solutions advisers (FSAs) on the Merrill Edge platform. In the first quarter, it passed its rival in adviser headcount for the first time since Morgan Stanley and Smith Barney merged in 2009. Morgan Stanley reports earnings tomorrow. The Merrill advisers were also slightly more productive in the period than they had been in the first quarter, according to supplemental information in BofA's earnings release. The average Merrill adviser produced annualized revenue of $915,000 in the second quarter, versus $905,000 from January through March. That's down more than 5% from the average $965,000 at the end of second-quarter 2011, however. The productivity numbers do not include FSAs, who are on salary. Productivity of the firm's experienced adviser force, excluding trainees, was $1.26 million in the second quarter, according to Merrill Lynch Wealth Management spokesman Matthew Card. That compares with $1.24 million in the first quarter.

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