Bank of America CEO Brian Moynihan said late Tuesday that he was reorganizing the bank's management and operating units around its three core customer groups: individuals, companies and institutional investors. As part of this shuffle, Sallie Krawcheck is no longer head of wealth management and will be leaving the firm.
Moynihan appointed David Darnell and Tom Montag to the new posts of co-chief operating officers and made them immediately accountable for all operations—moves that some experts are praising. Darnell is now in charge of the “individual customer” track, including the16,240-strong Merrill Lynch advisor force, Merrill Edge advisors and reps with U.S. Trust.
Roughly two years ago, Bank of America selected Krawcheck (left), a veteran of both Sanford Bernstein and Citigroup, as the head of its global wealth and investment management group, which had just come to include Merrill Lynch.
"I am pleased with the work the team has done, in particular the strong performance of the business," Krawcheck said in a statement. "It has been an honor to lead Bank of America Global Wealth and Investment Management during a challenging time."
Krawcheck has been one of the most powerful women on Wall Street for some time, leading to her being named to AdvisorOne’s 50 Top Women in Wealth as recently as this July.
In addition to being an advocate for Merrill Lynch, its brokers and the wirehouse model, she has also addressed the unique needs of women when it comes to financial planning.
Time to Streamline
"Sallie has led the wealth management businesses through an important integration with the broader franchise," Moynihan continued. "De-layering and simplifying at the scale in which we operate requires difficult decisions.”
Montag will be focused on the units that serve companies and institutional investors, including institutional investor services, such as Bank of America Merrill Lynch Global Research, and the global markets sales and trading businesses.
"Today is a significant step in the continued transformation of our company," said Moynihan in a press release. "David and Tom are leaders skilled at driving profitability and growth by focusing their businesses on all we can do for customers. They are accountable now for delivering our entire franchise to all our customers and clients."
Given the need for further streamlining of staff and management at BofA, “Moynihan is doing the right thing,” said Chip Roame (left), head of the consultancy Tiburon Strategic Advisors in a phone interview with AdvisorOne. “The super focus on clients and the other associated changes are all good things.”
BofA had to do more delayering in order to boost profits, Roame says. “This means making it smaller throughout the organization—not just at the lower levels but at higher levels, where it’s top heavy, too,” he explained. “And Moynihan really made this organization have some clean lines.”
Prior to her work for Citi, Krawcheck was chairman and chief executive officer of Sanford C. Bernstein & Co., Inc., and an executive vice president of Bernstein's parent company, Alliance Capital Management.
Darnell joined BofA as a credit analyst in 1979 and most recently has served as head of Global Commercial Banking. He also led the Middle Market Banking Group and the bank’s consumer and commercial banking operations in the central region of the U.S., based in St. Louis.