To bring on next-generation advisors, Bank of America Merrill Lynch has raised the yearly starting pay of trainees by $10,000 a year. It’s also boosting its hiring of trainees.
This quarter, the wirehouse is bringing on 100 more trainees than it did in the year-ago period. The figure of its trainees so far in 2019 stands at 1,700.
“Merrill sees a team environment with experienced advisors as part of setting them up for success,” according to a statement.
The moves come as the number of traditional advisors at Merrill is shrinking: It stood at 14,690 as of June 30, down 130 from a year ago and 71 from the prior quarter. (Merrill will update this figure on Oct. 16, when it reports its third-quarter earnings.)
Recently, four advisors with over $950 million in assets and about $5.5 million in yearly fees and commissions left Merrill Lynch to join Stifel Financial — including Richard Murphy Jr., and Kevyn F. Schroeder, both of whom had been with the Thundering Herd for the past 31 years. That followed the departure of a four-advisor team with $675 million to Ameriprise Financial.
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The wirehouse raised the yearly pay of its trainees about six months ago. Their average salary is now about $65,000, according to a report in Business Insider, which also says Merrill has tasked 75 managers to coach and track the performance of 3,500 trainee advisors.
Merrill Lynch Wealth Management President Andy Sieg says its recruiting of experienced advisors today is “pretty narrow, and the economics are very different than they used to be,” according to the report.
It is focused less on nabbing advisors from its chief rivals — Morgan Stanley, Wells Fargo and UBS — and more on adding veteran reps from regional and independents broker-dealers, Sieg explained.
Across the industry, there were roughly 21,000 new trainees in total, according to Cerulli Associates.
Meanwhile, Merrill continues to help advisors grow their productivity. The average level of yearly fees and commissions per FA at the firm was $1.08 million as of June 30, up about 6% from the year-ago period. The level for veteran reps also grew 6% year over year to hit $1.4 million.