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BofA’s Biggest Reshuffling Since Krawcheck’s Exit Keeps Getting Bigger

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Bank of America’s (BAC) upper echelons are going through a host of departures, while its wealth management group is undergoing a bit of reshuffling of its own tied to the exit of two individuals.

General counsel Gary Lynch is likely to depart from his current role over the next few months, the The Wall Street Journal reported early Friday. However, he is expected to remain with the bank, perhaps as an advisor.

This news comes less than three days after the bank said CFO Bruce Thompson had “decided to step down” after more than five years in that position. In addition, wealth management chief David Darnell recently announced plans “to retire by the fourth quarter,” after more than 35 years with the company; this news was shared with advisors on June 23 and with the public on July 16.

Bank of America has “a long history of management instability,” according to Rafferty Capital Markets analyst Dick Bove, in a report Thursday that was cited by the WSJ.

Global Wealth & Investment Management went through a dramatic shakeup in 2011, when BofA CEO Brian Moynihan pushed out Sallie Krawcheck. At the time, Darnell was widely quoted as saying that he was willing to “get out of the way” of existing managers, so they could lead performance-enhancing efforts affecting advisors.

Upon Darnell’s retirement in late 2015, Terry Laughlin will take over as head of the wealth group.

“Terry will be returning to businesses he knows well,” BofA said in an employee memo this week. “Terry’s impressive background includes various senior leadership positions with Bank of America and predecessor entities including Merrill Lynch, where he was chairman and chief executive officer of Merrill Lynch Bank & Trust. In his new role, Terry will retain his current responsibility for our U.K. card business.”

Other Shifts

This week’s developments come one month after other changes were announced in the wealth group.

On June 23, the company told its 16,419 advisors — who had yearly fees and commissions of $1.04 million on average as of June 30 — that it was “announcing a series of changes to our leadership team, underscoring the depth and versatility of talent across Global Wealth & Retirement Solutions (GWRS).” The shifts, which were explained by GWRS head Andy Sieg, include the following:

  • Chris Hyzy will lead the newly created Global Wealth & Investment Management (GWIM) Chief Investment Office, reporting jointly to Andy Sieg and U.S. Trust President Keith Banks; he remains chief investment officer for U.S. Trust.
  • Ashvin Chhabra, former chief investment officer and head of Investment Management & Guidance for Merrill Lynch Wealth Management, is leaving the firm to run a family office.
  • Patricio Diaz will be chief operating officer (COO) for GWRS; he joined Merrill Lynch in 2007 and most recently served as COO for the Investment Management & Guidance business.
  • Lorna Sabbia will be head of Retirement & Personal Wealth Solutions; she previously led Managed Solutions, including the creation and implementation of the launch of the investment advisory platform Merrill Lynch One.
  • Keith Glenfield will head the Managed Solutions Group after leading the Alternative Investments business.
  • Nancy Fahmy will be the new head of Alternative Investments; prior to this role, she was head of Private Equity Origination and Technical Sales.
  • Liam O’Neil continues in his role as head of the GWRS Markets Group.

Though this June 23 memo contains a long list of changes, BofA sees the leadership reshuffling minimal given that no outsiders were involved.

“These appointments will help us continue the bold pace of innovation we’ve set, build on the momentum we have in our business and strengthen our integration with the broader enterprise,” Sieg said. “Under the direction of these leaders, I am confident our clients and advisors will continue to have access to the most comprehensive, relevant and innovative set of solutions in the marketplace.”

With the changes, Sieg, along with John Thiel, head of Merrill Lynch Wealth Management, and Keith Banks, president of U.S. Trust, the bank’s high-net-worth private banking and advisory channel, will report directly to Laughlin.

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