Despite the fact that new asset flows dropped in the second quarter, Merrill Lynch is not planning to tinker much with its compensation plans for 2020.
“We feel good about our [growth] trajectory,” according to a senior Merrill Lynch executive, who spoke with the media after parent firm Bank of America released its earnings Tuesday.
With veteran advisors on track to add an average of six new households in 2019, “We’re not anticipating compensation changes going into 2020. It’s going to be boring,” said the executive, who asked not to be named.
Merrill made significant changes to its Growth Grid in late 2017 with the aim of getting advisors to add at least three new household accounts with assets of $250,000 or more in 2018; it not, the registered reps incurred a 100-basis-point cut in their payout.
That minimum hurdle grew to four new households in 2019. Also to qualify for a 100-basis-point bonus, advisors need to have six household “credits,” which are awarded as follows: $250,000 to $2.5 million, 1 credit; $2.5 million to $10 million, 2 credits; $10 million to $25 million, 3 credits; and over $25 million, 4 credits.