Bank of America's broad financial advice franchise, led by Merrill Lynch Wealth Management, will continue to hunt for both young and experienced financial advisors this year, after finishing 2022 with a net increase of 427 financial advisors compared to the year earlier, a rise of 2.3%, for a total of 19,273.
Merrill Lynch will continue to fire on all four cylinders in bringing in new advisors this year, Andy Sieg, president of Merrill Lynch Wealth Management, said in a conference call with reporters Friday morning. Those are: the advisor development or training program; an apprenticeship for employees already working with teams of Merrill advisors; an effort to hire advisors with two to seven years experience in the industry; and hiring experienced advisors.
Sieg told InvestmentNews last March that after slowing its hiring of financial advisors during the Covid-19 pandemic, Merrill Lynch in 2022 was once again looking to bolster the numbers of its thundering herd. That appeared to have worked. The firm wanted to target more young financial advisors with limited experience in the industry and, more selectively, experienced advisors outside major metropolitan markets.
"We have the same expectations, low, single-digit growth of financial advisor head count in the year ahead," he said, adding that Merrill is targeting an increase in the range of 3% to 4%, with a focus on hiring advisors to work with high-net-worth and ultra-high-net-worth clients in the traditional Merrill Lynch franchise.
Sieg also mentioned that last year, the firm paid financial advisors $120 million of additional compensation via its "growth grid" pay plan, which rewards advisors who bring in healthy numbers of net new clients and households.
Wirehouses like Merrill Lynch and Morgan Stanley work with the wealthiest — and most profitable — clients in the financial advice industry and have more advisors generating $1 million or more in annual fees and commissions than do registered investment advisors or independent broker-dealers. The push to hire about another 800 financial advisors at Bank of America/Merrill Lynch also comes at a time when banks are laying off staff and preparing to cut costs as a result of recession fears across Wall Street.
Meanwhile, the wealth management franchise at Bank of America continued to perform well in 2022 despite the difficult broad stock market, with the S&P 500 stock index down 19.4% last year.
But in a summary of results released to reporters this morning, Bank of America used the term "record" only twice, compared to 25 times in a similar summary for 2021, when the S&P 500 increased nearly 27%.
But it hit records where it counts — in revenue and pretax income. Bank of America wealth management revenue for 2022 totaled $21.7 billion, a year-over-year increase of 5%, according to the company, and pretax income for the group was $6.2 billion, an increase of 8% compared to 2021.
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