The number of net new client households for Merrill Lynch Wealth Management advisors fell to 22,000 in 2020 from 35,000 in 2019 — representing a 37% decline.
Despite the dramatic drop-off, the company called last year’s achievement “pretty extraordinary given the environment,” noting that was “four times the pre-2017 household acquisition levels.”
The additions included 5,000 net new households in the fourth quarter, Merrill said.
Also, net client asset flows to Bank of America’s Global Wealth & Investment Management (GWIM) unit — which includes both Merrill Lynch and BofA Private Bank — were down 21% for the full-year 2020 at $19.6 billion vs. $24.9 billion a year ago, and fell 7% year over year to $7.60 billion in Q4’20.
Plus, the GWIM business reported a 16% year-over-year drop in Q4’20 net income to $836 million from $1 billion. Revenue fell roughly 4% from a year ago to $4.7 billion. Of that total revenue, $3.9 billion came from Merrill, down from $4 billion, while $831 million came from the Private Bank, down from $867 million.
In addition, Merrill is projecting low single-digit growth in the number of its advisors annually over the next five years, a senior company executive told reporters Tuesday. The increased advisor headcount would come despite slight declines in this figure for the past two years.
The company expects to achieve an increased number of advisors through the rollout of its advisory division strategy in 2021, the strengthening of its advisor development program, and by increasing the overall success rate of the next generation of Merrill advisors, the executive said.
The number of Merrill advisors dipped by 127 in 2020 and by 429 in the recent quarter to 17,331 as of Dec. 31, 2020; also, the number of Private Bank advisors slipped by 7 from a year ago and by 11 in the prior quarter to 1,759, the firm said, while pointing to the success of its growth strategy despite a challenging year dominated by the COVID-19 pandemic.
The total combined number of Merrill and Private Bank wealth advisors fell by 7 last year and by 300 from the prior quarter to 19,373 on Dec. 31, 2020. The wirehouse ended 2018 with 19,458 advisors.
Merrill’s average advisor 12-month trailing fees and commissions (or production) level was $1.17 million vs. $1.11 million in Q4’19. For the full-year, it was $1.13 million vs. $1.08 million in 2019.