The focus would reportedly be on training new brokers, which would save the unit some money, rather than engaging more aggressively in the expensive recruiting wars now going on between BoA's Merrill Lynch, Morgan Stanley Smith Barney, Wells Fargo Advisors and UBS.
"Merrill Lynch is returning to its roots. This is wonderful," said Chip Roame, managing principal of Tiburon Strategic Advisors, an industry consultancy. "The firm was always the best at training and integrating rookies. They moved away from this in recent years. I see it as a positive development that they are returning to their original model!"
Merrill's FA force now includes about 15,000 vs. 16,000-plus at the time of the BoA-Merrill Lynch merger was first announced in September 2008. In March 2009, the total number of FAs was 15,882.
"In Global Wealth and Investment Management, the financial advisor network of more than 15,000 was up slightly from the third quarter as the retention rate stood at the highest level in recent years and the company increased hiring, training and development of new advisors," the company said as part of its fourth-quarter 2009 earnings release.
In terms of trailing-12-month sales or production, Merrill advisors are now at $830,000 on average for the fourth quarter of 2009 and $817,000 for the full year 2009. Client balances in Merrill Lynch accounts total $1.43 trillion. The GWIM unit is now lead by Sallie Krawcheck, formerly of Citi/Smith Barney.
Rival Morgan Stanley - with 18,135 advisors in its Morgan Stanley Smith Barney venture - just reported that its fourth-quarter trailing-12-month sales stand at $692,000. Client assets are $1.6 trillion.
Bank of America's U.S. Trust unit has 3,957 advisors vs. 4.473 at the end of 2008. Client balances total $316 billion.
On February 4, Attorney General Andrew M. Cuomo of New York sued Bank of America and its former chief executive and chief financial officer over its failure to disclose a multibillion-dollar loss and big bonus payouts at Merrill Lynch before shareholders voted on the merger in December 2008, according to various press reports
The defendants in Mr. Cuomo's lawsuit are Bank of America; Kenneth D. Lewis, the firm's former chief executive; and Joe Price, its former chief financial officer. Brian T. Moynihan, Bank of America's current chief executive and at the time of the shareholder vote was general counsel, was not named in the lawsuit.
According to Cuomo, BofA misled not only its shareholders, but also forced taxpayers to provide an additional $25 billion to help support it through the Merrill acquisition.
This news comes on the same day that Bank of America announced news that it had entered into a settlement with the SEC to resolve issues surrounding the Merrill Lynch merger and with the Attorney General in North Carolina.
According to BofA, "After conducting a full investigation in connection with the actions settled today, the SEC staff has determined that no one acted with any intent to mislead and that charges against individuals for their roles in connection with proxy disclosure are not appropriate."
Under the terms of the settlements, BofA agreed to pay $1 in disgorgement and an additional $150 million as a civil penalty to be distributed to shareholders as part of the SEC's Fair Fund program. A payment of $1 million will also be made to the North Carolina Attorney General for its consumer protection purposes; it is not a penalty or a fine, the bank says.