What You Need to Know
- The wealth unit ended the first quarter with 19,808 advisors, down 585 from a year ago and a drop of 295 from the prior quarter.
- Four of five veteran advisors who left Merrill to join rival firms over the past year had been recruited from other firms.
- Merrill has been restructuring its advisor training program and is planning an announcement soon about its future operations
Bank of America’s wealth unit, which includes Merrill Lynch, ended the first quarter with 19,808 advisors, down 585 — or 3% — from a year ago and a drop of 295 — or 1.5% — from the prior quarter’s 20,103. This includes advisors across its Merrill Lynch Wealth Management, Bank of America Private Bank and Consumer Investments businesses.
The declines are “in large part… due to slower hiring into our advisor development program last year in light of the environment” caused by the pandemic, a senior Merrill executive said Thursday. Still, Merrill is projecting low single-digit growth in the number of its advisors annually over the next five years, he explained.
Four of five veteran advisors who left Merrill to join rival firms over the past year had been recruited from other firms. This situation “reaffirms for us the commitment to organically growing our advisors and helping them achieve long-term success,” according to the executive.
Despite apparent headwinds in its retention of veteran advisors, “we continue to selectively hire” such registered representatives, he said.
The firm’s efforts include the Accelerated Growth program, aimed at advisors early in their careers, and the Community Market program, focused on advisors in some underserved markets.
“Despite the challenges of not being able to meet in person, in 2020 we hired 210 advisors through these programs,” which was “on par” with 2019 and it hired nearly 60 advisors in Q1 in those programs, according to the executive. “We expect this hiring to accelerate as 2021 unfolds.”
Merrill is particularly focused on growing its presence in key markets like Florida and the San Francisco Bay Area and Silicon Valley, along with 6-8 other markets.
Q1 Financial Results
The wealth unit had total assets of $3.5 trillion in the first quarter vs. $2.7 trillion a year ago and $3.4 trillion in the prior quarter.
Net client flows were $18.2 billion, up from $7 billion a year ago and $7.6 billion in the prior quarter.
The quarter’s increased flows were “driven by deepening relationships with existing clients as well as attracting new client households,” the executive explained.
The Merrill Edge business had a “very active quarter” in which “clients opened 170,000 new accounts,” which was its second-strongest quarter to date, he told reporters.
Meanwhile, in Merrill Lynch Wealth Management, “momentum in the second half of last year accelerated in the first quarter, reaffirming our strategy of growing organically,” he said.
First quarter Merrill revenue grew 3% from last year and 7% from the earlier period to nearly $4.2 billion, which was a record for any first quarter and its second-best quarter ever, the executive said. Asset management fees hit a record $2.5 billion, up 12% from a year ago.