A day after Bank of America replaced Sallie Krawcheck as the head of wealth management, advisors and observers are asking what other changes can be expected in management and compensation.
Some recruiters say Krawcheck’s departure may be the final straw for advisors already anxious about Merrill’s increasingly bank-centric culture. But the new head of Merrill Lynch–David Darnell–plans no further changes to the unit’s core leadership or its compensation, according to a source familiar with the company.
“Sallie Krawcheck’s departure in not a great loss for the Merrill advisors, as she was not super accessible to them or out a lot in the field,” said Mindy Diamond of Diamond Consultants in a phone interview with AdvisorOne. “But they are concerned that her departure comes on the heels of other developments that have a negative impact on advisors.”
Over the past year and half, the members of Merrill’s “thundering herd” have been complaining about the hierarchy and other aspects of the firm’s bank culture, the tremendous volatility of BofA stock (BAC) and issues surrounding Countrywide, the troubled mortgage firm it bought in 2008, says Diamond (who does recruiting for Merrill-rival Morgan Stanley and other clients).
“I’ve heard for a while, that the bank mandates are not meshing well with the entrepreneurial spirit of the advisors and their desire to offer the best service possible to clients,” she explained. “Now, they’ll be reporting to bankers everywhere they look, and bankers aren’t known to get the advisor mentality.”
In late April, Krawcheck (left) tapped John Thiel, who was in charge of the private bank and investment group for Merrill at the time, to lead the roughly 16,000 advisors. Thiel joined Merrill as an advisor in Tampa, Fla., in 1989.
Thiel remains in place as the head of the “thundering herd,” a source familiar with the company said Wednesday, along with other leaders. For advisors, that’s good news, according to at least one New York-based expert.
“John Thiel is very highly regarded by advisors,” said Mark Elzweig of the executive-search consultancy Elzweig & Co. “As a general rule, most advisors are primarily focused on their own practices and take changes in senior management at 20,000 feet above them in stride.”