The compensation plan for Merrill Lynch advisors — which had major shifts starting in 2018 — is not going to be altered for 2020, according to a senior executive.
Speaking with the media after parent firm Bank of America released earnings, the leader said: “We’re not going to have compensation changes going into 2020. … Just to be more specific, we’re not going to increase growth rate targets in 2020.”
At another point during the call, he added that changes to the grid are “off the table.”
Merrill made significant adjustments to its growth grid in late 2017 with the aim of getting advisors to add several new household accounts with assets of $250,000 or more each year.
This year that target is six household “credits,” which are awarded according to the level of client assets, 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.
As of the third quarter, Merrill Lynch advisors are on track to bring in an average of 5.5 households in 2019. That figure is down slightly from the figure of about six households mentioned during a second-quarter earnings call.
The executive pointed to “seasonality” as the main reason for the decline. “It should trend close to six as we get closer to year-end,” he added.
This quarter, Bank of America’s Global Wealth and Investment Management unit — which includes both Merrill Lynch and BofA Private Bank — stopped releasing a separate breakdown of figures for Merrill Lynch advisors and those with Merrill Edge, its mass affluent wealth program.
As of the third quarter, Merrill has 17,657 financial advisors, up from 17,657 as of June 30, 2019, and 17,456 as of Sept. 30, 2018. Last quarter, Merrill said it had 14,690 Merrill Lynch FAs and 2,818 with Merrill Edge (part of BofA’s Consumer Banking unit).