Plans for a new enhanced grid were described in an internal company document obtained by Dow Jones. “The proposal is under review, and we decline to comment further,” a Merrill spokesperson said in a statement.
The new incentives aim to support both advisors and teams who, for instance, have 80% of their business with clients that have $250,000 or more in investable assets. Merrill now has some 15,700 advisors and is led by Sallie Krawcheck.
In addition, advisors’ books of business should include 150 households or less, according to Dow Jones. Other objectives reportedly require that advisors have at least 98% client retention, 35% of client assets in fee-based accounts and clients using several products, such as both retirement planning and bank products.
Some incentives would also apparently reward advisors with external designations.
“These incentives make a lot of sense. Merrill is encouraging its salesforce to focus on affluent households and rewarding advisors who have fewer, but larger client relationships,” explained Mark Elzweig, a New York-based executive-search consultant, in an interview.
“Big producers typically have relationships with fewer key accounts than smaller producing advisors who may have zillions of accounts that they touch less frequently,” Elzweig said. “Assets are also a lot stickier when clients are serviced via a broad-based product mix and within a team structure.”
The new incentive plan appears to dovetail with Merrill’s expansion of Total Merrill, its platform for mass-affluent clients, or those with between $50,000-$250,000 of investable assets. These plans include the doubling of the advisors that service this client base–from 500 to 1,000 this year.