What You Need to Know
- Merrill Lynch expects its new 18-month advisor training program will be more efficient and increase the advisor success rate to 80% from 20%.
- The firm continues to focus on growing its advisor count organically rather than by recruiting many veteran brokers.
- Merrill also plans to continue investing in technology.
Merrill Lynch’s new 18-month Advisor Development Program stands to significantly increase the success rate of the firm’s advisors, from just 20% to 80%, Andy Sieg, president of Merrill Lynch Wealth Management, told the online Morgan Stanley U.S. Financials, Payments & CRE Conference on Monday.
Sieg also stressed on Monday that the company will continue to focus on organic advisor growth rather than the recruitment of experienced brokers.
The new training program, which is half the length of Merrill’s prior training program, is “going to be much more efficient,” he vowed.
Merrill has been running the largest advisor development program in the sector. “But when you look at that with a lens of expectations [for] 2021, it was a very inefficient program” in which “graduation rates were pretty low,” Sieg pointed out.
“Our success rate of advisors five years out is only about 20%” right now, he noted. To turn that around, the firm has “reset the program by more carefully focusing on talent coming in, having a more clear development path, more support in terms of oversight, as well as lead development, and then the right type of transition plan to become an advisor,” he explained.
“We think the success rate in this program can be pushing an 80% success rate over time,” he said, but did not specify how long he expects that to be.
“This will be overwhelmingly internal talent development, but we still maintain flexibility,” he was quick to add.
For example, when “we see early career advisors that may have started at other firms” and are already “licensed and trained [and] they look a lot like individuals that would be in the later stage of our development program, we’ll be hiring some of them and bring them over — but on a salaried program, not a traditional recruiting deal,” he explained.
There may also be “instances where we do want to have select inorganic acquisition of advisor talent [but] we would maintain great discipline around that,” he said. That could happen in a market where Merrill has a “particular need to accelerate our presence or where we see … an extraordinary level of growth happening,” he added.