There has been plenty of talk, mostly from Fox Business reporter Charlie Gasparino, about a cultural sea change at Merrill Lynch that has put a burr under the saddle of its financial advisers, inspiring many of them to leave the brokerage firm. But now a new report suggests that it’s not necessarily the culture, pillared on wheatgrass shots and meditation, but rather structural changes that are creating disenchantment within the Thundering Herd.
Sources have told Business Insider that Bank of America has tightened its grips on once-entrepreneurial Merrill Lynch, which it bought during the financial crisis. The two biggest examples cited are Bank of America allegedly having say over what advisers can tell their clients– two large teams were allegedly let go after advising clients to buy into a hedge fund that wasn’t on Merrill’s platform – and a new distribution process that deemphasizes lower-tier customers, according to the report.
A source told Business Insider that brokers are “suggested” to push clients with less than $250,000 in assets to a call center, where they’ll work with young financial advisers in training. That or they can manage their assets themselves using the firm's online Edge platform.
[efc_twitter text=""Bank of America is trying to 'Bankamericatise' Merrill Lynch, and the older guys are fed up,""] one source said.
Now that’s not to say things are falling apart; Merrill’s revenue numbers continue to improve, despite reports that headcount is falling. But it does appear that the old days of the Thundering Herd, as veteran Merrill brokers like to be known, may be waning.
The news comes on the heels of several other reports suggesting brokers within the firm are upset with the leadership style of brokerage chief John Thiel, who brought in a wellness guru and encourages daily naps and meditation.
At the end of the day, it seems that the hands-on approach that Bank of America is taking is the real problem. But it’s also 2014. No one working in any capacity at a big bank is doing so without holding someone else’s hand. That’s just the reality.
It makes sense then that smaller firms that deal with less red tape are winning the recruiting war. Raymond James just added a net of 68 U.S.-based advisers in its last fiscal year, for example, its best recruiting performance since 2009. Gasparino reports that the number of Merrill advisers has fallen below 15,000, and is actually closer to 14,000.
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Quote of the Day: “It seems like the banking side thinks it knows better than the broker dealer ... They want everyone to look the same, act the same, and wear pins the way Bank of America bankers do.” – an anonymous Merrill Lynch broker on the culture change there