Top 5 Trends at Merrill Wealth Management in Q4

Bank of America’s Merrill Lynch Wealth Management division had a mostly strong fourth quarter ended Dec. 31 that, in a Friday conference call with reporters, Andy Sieg, the division’s president, largely credited to the performance of the firm’s advisors and increased client growth and engagement.

Overall, BofA reported revenue, net of interest expense, increased 11% from Q4 the prior year to $24.5 billion, while profit increased to $7.1 billion from $7 billion.

Income in the Global Wealth and Investment Management division, which includes Merrill Lynch Wealth Management, was flat at $1.2 billion.

The firm reported wealth management client balances of $3.4 trillion, down 12% from $3.8 trillion, “driven by lower market valuations, partially offset by positive net client flows,” it said in an earnings news release.

Together, Merrill Lynch and BofA Private Bank added more than 9,000 net new client relationships in the second half of 2022, Sieg said on the call.

The firm added 25,000 net new households last year, including a fourth-quarter record of 8,500, up 27% year-over-year, representing the strongest quarter since Q2 2019, Sieg said.

“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,” he told reporters.

The firm, meanwhile, ended Q4 with 19,273 advisors serving clients “across the wealth continuum” of the firm, Sieg said. That was up from 18,841 at the end of Q3 2022 and an increase of 800 advisors since mid-2022, Sieg said.

Here are five trends that emerged at Merrill in Q4, based on its earnings report and executive commentary:

1. Staff shrinkage is turning around.

The firm reported having 19,273 advisors at the end of Q4, up from the 18,841 it had at the end of Q3 2022 and 18,500 it reported for the second quarter of 2022.

Previously, the firm had seen advisory staff shrinkage in every quarter since Q3 of 2021 as it prepared to start a revamped, 18-month advisor training program.

“Our strategy remains to use a wide variety of tactics to continue growing our advisor course,” Sieg told reporters. The firm still expects “consistent low single-digit growth in our advisor headcount over the years ahead,” he said.

2. Merrill will continue to invest in advisors.

“This is a vibrant and growing market to serve and we’ll continue to invest behind that,” Sieg told reporters. He didn’t specify how much of an investment the firm is making.