By taking more of a hands off approach with its Merrill Lynch financial advisors, Bank of America Corp. saw “historically” low broker attrition in the fourth quarter and plans to add advisors this year, said Sallie Krawcheck, the president of Bank of America Global Wealth.

“Going into the downturn, I’d have expected advisors would’ve left the business altogether or gone to independent firms, and we’ve seen some of that, but not as much as expected,” she said during a conference call Thursday.

Krawcheck said that attrition rates nationally and at Bank of America Merrill Lynch “ranged higher” at the beginning of last year, but for the Charlotte-based company attrition rates were at “all-time” lows in the fourth quarter.

For example, she said, attrition of top producers was “half of the previous best year we ever had.”

“I think that all the fears that [Merrill Lynch] advisors had and all the things that were whispered about,” weren’t true, Krawcheck said. “There are no quotas here and no plans that requires advisors to sell x, y or z product. … These advisors remain in the same offices with the same managers. … They are now just working with an organization that continued to invest in this business during the downturn.”

According to Discovery Database, 425 wirehouse advisors changed firms in December, up from only 177 in November and 361 in October. Indeed, December saw the biggest number of wirehouse advisor movement since August when 434 advisors changed firms.

Industry recruiters expressed surprise at those figures as most said the end of the year had been very quiet.

“I don’t think these are big [producing] brokers. They’re mostly smaller guys in the $400,000 to $700,000 [trailing-12 month production] range going to regionals, independents and boutiques,” said Rick Peterson, a Houston-based recruiter.

Barbara Herman, an executive recruiter at Diamond Consultant in Chester, N.J., said at the end of last year there was less attrition in the industry because there was “record” attrition in the first nine months of the year.

“A lot of advisors approached the end of last year and chose stability for their clients and figured they would reconsider moving [this year,]” she said. “Merrill Lynch was effective in retaining a significant number of advisors through its retention package, particularly when it came to their largest producers.”

Other wirehouses, like UBS, are scrambling to retain advisers. Other recruiters said that retention rates are stabilizing at Bank of America Merrill Lynch as compared to a year ago.

“I am sure attrition has dropped dramatically from when Wall Street was on fire,” said Bill Willis, a California-based recruiter. “The fourth quarter of 2008 was pretty chaotic. Advisors are still moving to independent firms, but it is not like a steady stream than a stampede. There isn’t a mass exodus going on here.”

Bank of America Merrill Lynch plans to add to its advisor headcount this year, Krawcheck said, but she said she doesn’t expect to add at a “high rate.” She said the company is interested in adding advisors that are new to the wealth management business.

Willis said that he is skeptical about this. He said Bank of America Merrill Lynch is still going after the “big people on Wall Street.”

“Unless they have changed their stance in the past two days, they are aggressively pursuing top producers,” he said. “They want the best and the brightest, not the mediocre. You have to spend money to attract those folks, but then again it is politically incorrect right now to talk about spending on Wall Street.”

Willis said that large companies are feeling a “general population shift” as some of their advisors move to independent channels. Other large wealth management companies, including Morgan Stanley Smith Barney and UBS, have been forced to alter their retention packages to retain top talent.

“Right now UBS seems to be dealing with a few more problems than the other other companies and their future is a little uncertain,” he said. “They are a big target on Wall Street, both for the other big firms and for their advisors moving to the independent channel.”

Krawcheck said the reality at Bank of America Merrill Lynch is a lot different than the “buzz and the industry chit chat. This transaction was good for our advisors.”

“Clients are saying to their advisors that they want to be someplace that is financial strong and gives [the advisor] the capabilities to solve problems during the difficult years ahead,” she said. “I’m not Pollyanna. I worry about everything. But right now the business feels better than the common wisdom that is out there.”

Herman said Bank of America Merrill Lynch could see more attrition this year.

“Bank of America was relatively slow to begin exerting its own culture and its own influence, but advisors tell us that they are starting to feel the influence of Bank of America,” she said. “Every advisor I talk to at Merrill Lynch is telling us that they are not working for the same firm that they worked for a year ago. … There has been a gradual shift in culture and advisors are starting to feel it and take notice of it. An advisor told met that these subtle changes foretell future heavy-handedness.”

Bank of America Merrill Lynch is interested in expanding its business, Krawcheck said. The company is investing in its existing advisors “to help them build their practice.”

Andy Sieg, the head of Bank of America Merrill Lynch’s retirement and philanthropic services business, said during the conference call that the company also wants to continue to invest in its retirement business. He said the company will begin “branding more aggressively in this space” over the next couple of months as part of a multi-pronged growth strategy.

“This business is a hidden gem in this franchise,” he said. “There is tremendous room to grow.”