Bank of America is reportedly going on a spending spree to add more financial advisors.
According to an article in the Financial Times, which quoted unnamed sources, Bank of America [BAC] is looking to add 2,000 advisors. Most of the additions will be in the United States, with some small additions also in Europe and Asia, the FT said. And many of them will be young trainees instead of more experienced advisors lured from other companies.
Bank of America was not available for comment.
Bill Willis, an industry recruiter, said that both Merrill Lynch and Morgan Stanley Smith Barney [MS] are aggressively training new advisors. He said that all four wirehouses are also very interested in recruiting.
In fact, he said it would not be surprising if the goal of 2,000 new advisors at Merrill ultimately has a larger component of recruits and fewer trainees.
On Wall Street recently reported that Bank of America is enjoying the fruits of its acquisition of Merrill Lynch, one of the nation's largest wirehouse operations.
BofA's global wealth and investment management unit, which includes Merrill Lynch Global Wealth Management, U.S. Trust, Bank of America Private Wealth Management and Columbia Management, posted net income of $1.3 billion, up from $1.1 billion the prior quarter. Net income from Merrill Lynch Global alone was $1.5 billion, up 22% from the prior year, while U.S. Trust reported net income of $174 million. Columbia posted a net loss of $7 million, which the bank blamed for dragging down otherwise positive results.
Late last year, the Charlotte, N.C. company's board tapped Brian Moynihan to succeed Ken Lewis as chief executive officer.
Alois Pirker, research director at Aite Group, said in a statement that the announcement to add 2,000 retail brokers to the already 15,000-strong broker force shows how important headcount is in this business.
“BofA realizes that [its] opportunities lie within the client base of the retail banking side,” Pirker said. “If this cross-selling effort is done well, Merrill's asset base could see a significant boost. The tricky aspect of this plan is that it will take a bank-brokerage type of unit, paired with online brokerage capabilities and call center-based brokers in order to make this work in a scalable way,” Pirker said. “The first was cut back at the beginning of the integration with Bank of America, the other two aspects are relatively new territory for Merrill as its core clientele has traditionally been served through a high-touch advice model. [Sallie] Krawcheck's experience from Citi [C] will come in handy in this difficult endeavor,” Pirker added in the statement.