Merrill to hire steadily for HNW, UHNW advisors

Merrill plans steady hiring for HNW, UHNW advisors

January 13, 2023 11:31 PM

Merrill Lynch head Andy Sieg SIFMA — Merrill Lynch President Andy Sieg.

Despite lackluster revenue and profits in the fourth quarter, the wealth management arm of Bank of America reported strong organic growth and continued its third-quarter uptick in hiring financial advisors, in a reversal from earlier in the year.

Andy Sieg, the president of Merrill Lynch Wealth Management, said Friday in a call with reporters that the bank's combined wealth units — including Merrill and Bank of America Private Bank — as well as the consumer investment businesses, had hired around 800 advisors in the second half of 2022. Of those, about half came in the fourth quarter, for a total of 19,273 to end the year.

Sieg declined to break down advisor hiring by unit but said it was "in all areas of the wealth continuum."

He added that the firm planned to continue augmenting its advisor base at a steady annual rate of around 3-4% over the following five to 10 years. Merrill aims to do most of the hiring, Sieg said, citing the importance of a strong human relationship when attracting the wealthiest clients.

"Technology is, of course, important to deliver the full breadth of what we have to offer, to ensure that there is high quality and scale in the business," Sieg said. "But as you are growing in the high net worth and ultrahigh net worth segments, it's key to continue to invest behind and to continue to scale your advisor force."

SIFMA Private Client Conference Andy Sieg, president of Merrill Lynch Wealth Management, 2019 photo

Industry News

Merrill swells advisor ranks with young talent

October 17, 2022 7:45 PM

To see the main takeaways from Merrill's fourth-quarter earnings, scroll down the slideshow. For coverage of the firm's third-quarter earnings, click here. For a look at the results from the second quarter, click here.

The big numbers

Net income in the bank's Global Wealth and Investment Management division fell 2% year over year in the fourth quarter of 2022 to $1.2 billion, according to an earnings press release.

The combined wealth businesses reported quarterly net revenue of $5.4 billion, which was essentially flat year over year.

Client acquisition

Complementing advisor growth, Merrill added 25,000 net new households in 2022 as new advisors brought their books of clients and existing advisors reached new prospects or persuaded clients to open new accounts that generated more income.

Over 9,000 of those came in the fourth quarter: around 550 from the Private Bank and 8,500 from Merrill, according to the earnings release.

For Merrill, this growth was a fourth-quarter record and represented a 27% increase year over year, a company spokesperson said in an email.

"This net new household growth is being seen across the country, particularly strong in places such as Florida, Texas, as well as in Nevada and the Carolinas," Sieg said.

Client assets

Total client AUM fell 14% to $1.4 trillion, from $1.6 trillion a year ago as rocky markets assailed client accounts. Merrill had client AUM of $1.1 trillion and Private Bank had AUM of $314 billion.

Total client balances also fell 12% to $3.4 trillion year over year. At Merrill, client balances fell to $2.8 trillion, down 12% from $3.2 trillion a year ago. At the Private Bank, client balances fell 10% to $564 billion, down from $625 billion.

Deposits also fell 17% year over year across the wealth units to $324 billion, from $390 billion as clients moved money out of riskier investment accounts into cash and cash equivalents generating yield, such as CD's and treasuries. "You are also, in this environment, seeing broader conversations around yield, on liquidity with clients," Sieg said.

However, this was somewhat offset by increased lending activity, as income from loans and leases grew 7% to $227 billion, from $212 billion at the end of 2021—reflecting steady growth in this area over the past year, according to the earnings slideshow.

A look ahead

"Financial planning discussions increased significantly in 2022, up 40% over the prior year and at a five-year high. And we anticipate these discussions between advisors and clients will continue to increase in 2023," Sieg said.

He added that the firm had been slowing its recruitment of experienced advisors as it underwent internal preparations with tech upgrades and strategy to position itself for harnessing what it saw as long-term wealth opportunities in the U.S. market, but now intended to begin deploying more recruiting for those advisors as well as increased tech capacities, including data analytics to suggest services such as tax-loss harvesting, to win more clients for the firm at large.

"My expectation would be in 2023, you'll see experienced [advisor] hiring be a somewhat more visible component of our growth strategy," Sieg said.

Merrill plans steady hiring for HNW, UHNW advisors

The big numbers

Financial advisors

Client acquisition

Client assets

A look ahead