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Merrill to Bar Trainees From Cold Calling: Report

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What You Need to Know

  • The firm moved to end cold calling last summer after outreach-related violations.
  • The trainees will use internal referrals and LinkedIn messages instead.

Merrill Lynch Wealth Management will no longer let its 3,000 advisor trainees make cold calls, according to a report in the The Wall Street Journal.

The wealth unit, owned by Bank of America, is set to announce a new training program Monday that prohibits this activity, people familiar with the matter told the paper. Instead, trainees will be asked to rely on internal referrals and LinkedIn messages.

The development follows Merrill’s move last summer to end cold calling in response to outreach-related violations, according to Business Insider, which obtained a copy of an internal memo written by Jennifer MacPhee, who later retired from her role as head of Merrill’s training program. (Both MacPhee and Merrill said her departure was unrelated to the violations.)

“We are leaning much more heavily on leads and referrals from the broader company,” said Merrill President Andy Sieg during a call with analysts in April. “There is also an opportunity to be much more modern in terms of the way we are reaching out to prospective clients.”

The trainees should get more referrals from the bank’s base of 66 million retail clients, people familiar with the matter told the Journal.

Before the pandemic, Merrill’s trainees were expected to contact at least 45 prospects a week, meet with six and have some $12 million in assets by the end of their training program, according to the report, which noted that some chose to buy lists of phone numbers to meet the requirements.

Do-Not-Call Violations

Merrill Lynch terminated two broker-dealer representatives who violated the firm’s Do Not Call List policy late last year, according to the Financial Industry Regulatory Authority’s BrokerCheck website.

Disclosures on the reps’ reports at BrokerCheck say they were discharged due to “Conduct inconsistent with Firm standards related to the Firm’s Do Not Call list.”

Nicholas John Ferguson was terminated Dec. 15 and was with Merrill in New York since September 2017, which marked the start of his career in the industry, according to BrokerCheck. After leaving Merrill, he went to work for LPL Financial, his report shows.

Ethan Kunin was terminated by Merrill on Dec. 18. He worked for the firm in Austin, Texas, since September 2018, according to BrokerCheck. Earlier, he worked at AXA Advisors since March 2018.

Ferguson and Kunin each remained registered with Merrill until January, according to BrokerCheck. Neither of them responded to requests for comment. In February, Merrill declined to comment on whether other reps at the firm were terminated recently for the same reason.

In 2019, Merrill terminated veteran brokers Todd Bendell and Jonathan Elliott, saying they engaged in “solicitation of prospects inconsistent with Firm standards” and then didn’t fully cooperate with reviews by the company, according to BrokerCheck.