Merrill, Private Bank Profits Jump 28%; Advisor Headcount Dips

The rate of attrition among Merrill’s experienced advisors was 3.6% in Q1, which Sieg told reporters was again lower than the wirehouse’s historical average. The number of Private Client advisors, meanwhile, grew 8% to 500 in the quarter.

The decline in advisor headcount was again due largely to the wirehouse’s 18-month pause in hiring trainees during the pandemic and in preparation of launching its new advisor development program in summer 2021, Sieg said.

Training Program

“There are approximately 2,000 advisors across the new training program and our legacy training program,” he told reporters. “Now that number will be growing. But that total 2,000 is down more than a thousand versus a year ago. And, if we look back a couple of years, there were more like 3,500 trainees in our development program.”

There were about 1,000 advisors who entered the new training program as of the last earnings call, the according to the company.

The new program is “performing well” overall so far, Sieg went on to say. The company is still looking to graduate 1,000 advisors from the new program each year and “will be building toward that number over time,” he told reporters.

The company said during its prior earnings call that the program would “scale in the course of this year” and, “quarter by quarter, you’ll see the ranks of this program increase.”

Next-Gen and Retirement Programs

The wirehouse has also been bringing in, over the past couple of years, early career advisors from rival firms as part of Merrill’s Accelerated Growth Program, with about 200 being added each year, he also said.

That is “another important way to develop next-generation advisor talent,” he explained, adding: “This year, we’re looking to more than double the annual AGP hiring” to add 500 of these early-career advisors.

Meanwhile, there have been “significantly fewer” advisors than expected going into the new, enhanced version of the firm’s retirement program, the Client Transition Program, that launched in the fall, Sieg noted.

The company still expects its overall headcount will increase by 3% to 4% annually over the next five to 10 years, for a net increase of 600-700 advisors each year, Sieg said, responding to a question from ThinkAdvisor.

Alternative Investment, Digital Engagement Growth

The company continued to see growth in alternative investments and digital engagement in Q1, Sieg said.

Alternative investment AUM balances jumped 40% to over $70 billion from a year ago, while gross sales in Q1 soared over 100% to $5.9 billion, the company said.

Meanwhile, a record 81% of wealth management clients are actively using online or mobile platforms, Sieg told reporters. “Advisors are also increasingly leveraging digital solutions,” he said.

Wealth management client interactions with Erica, BofA’s artificial intelligence-driven virtual voice assistant that is part of its Digital Wealth Overview tool that launched in early 2021, increased 19% from a year ago and 1.7 million secure messages were sent between advisors and clients, the company said.

Merrill Mobile Advisor Experience (MAX), which launched in August and gives advisors access to a full range of workstation features while on the go, was used almost 350,000 times in Q1, up 56% from the fourth quarter, the company said. Sieg predicted that number would continue to increase.

(Pictured: A Merrill Lynch branch office; Photo: AP)