Merrill Lynch notches record $2.25T in client balances

Register now

Merrill Lynch hit a record of $2.25 trillion in client balances even as advisor productivity slipped, the firm said.

Overall, it was a strong quarter for Bank of America's wealth management unit, which includes Merrill Lynch and U.S. Trust. Net Income rose 10% year-over-year to $769 million, the company reported on Friday.

Merrill Lynch's headcount also rose again, increasing by 143 advisors from the previous quarter to reach 14,954. By contrast, rival Morgan Stanley's broker ranks declined by 97 brokers to 15,759. Wells Fargo, meanwhile, broke a three-quarter losing streak to increase headcount by 37 advisors to 14,564 from the previous quarter.

Merrill credited the growth to its training program and recruiting efforts.

But while Merrill Lynch's headcount rose, advisor productivity dropped to $994,000 per FA from $1.04 million. The firm attributed the decline to lower net interest income as well as graduates of its training program joining Merrill's advisor ranks.

Like rivals UBS and Morgan Stanley, Merrill Lynch has reduced recruiting efforts aimed at experienced advisors. Earlier this year, Andy Sieg, head of Merrill Lynch Wealth Management, said the company would strive to grow its advisor ranks and aggressively hire next gen advisors.

But the company is not alone in renewing its focus on new FAs. UBS recently said it was retooling its training program.

Such moves come as the industry renews efforts to tackle a demographic dilemma. It's difficult for trainees to thrive in this relationship-driven business, but the industry is dominated by older advisors nearing retirement. The average age of a wirehouse broker is north of 53 years, according to research firm Cerulli Associates.

But even as the advisor ranks grey, wealth management firms are reporting rising profits and record AUMs, buoyed in part by rising markets.

Bank of America's wealth unit, Global Wealth & Investment Management, reported record client balances of nearly $2.7 trillion, up 7% from the year-ago period.

The wealth management business reported AUM flows of nearly $20.7 billion for third quarter, down from $27.5 billion for the prior quarter but up from $10 billion for the year-ago period.

For reprint and licensing requests for this article, click here.
Wirehouses Wirehouse advisors Earnings Recruiting Training Andy Sieg Merrill Lynch Bank of America Merrill Lynch