Merrill loses advisors but brings in record clients

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Merrill Lynch advisors are in growth mode, propelling the firm to new records for client balances, net income and revenue.

The advisors brought in more than 40,000 net new households last year, a 25% increase from 2018, according to the wirehouse’s fourth quarter earnings report.

Compensation changes made in recent years — the firm added incentives to drive advisors' growth — have played a role in encouraging advisors to win more clients.

“This is an important part of how we’ve turned on the growth engine at the firm,” said a Merrill Lynch executive who asked not to be named.

Seventy-percent of veteran advisors at the firm had their best year ever in 2019, according to the company. Productivity per advisor rose to $1.082 million for the year from $1.034, according to the company.

More than 3,700 advisors topped $1 million in production and more than 100 generated $5 million or more in revenue.

The firm’s growth grid remains intact in the compensation plan for 2020. Wirehouses typically make annual changes to these plans.

As a result of advisors’ efforts, client balances for Bank of America’s wealth unit rose 16% year-over-year to $3 trillion for 2019. Net income increased 7% to $4.3 billion for the year and revenue increased 0.4% to $19.5 billion.

Bank of America’s wealth management division accomplished these and other feats even as headcount declined slightly, dropping to 17,458 advisors from 17,518 for the same period a year ago.

The company also said referrals between its wealth management business and other banking units were up 25%. Bank of America’s wealth unit includes Merrill Lynch, Merrill Edge, its private bank and a robo advisor.

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