Nearly All Merrill Brokers Expected to Shift to Teams by 2030

What You Need to Know

Ten years ago, only 45% of Merrill advisors were on teams.
Today, it's almost 80% and, by 2030, it's expected to be 100%.
Not immediately clear was whether that is a prediction, a mandate or both.

Brokers at Merrill Lynch Wealth Management are increasingly shifting away from working on their own to becoming part of a team and just about all of them are expected to be part of a team eight years from now, according to Andy Sieg, president of the Merrill division.

The “future of wealth management” will be dependent upon “five foundational elements,” starting with “great advisors working as teams,” he said Thursday at the Securities Industry and Financial Markets Association’s Private Client Conference in Aventura, Florida.

“Ten years ago, only 45% of advisors at Merrill were on teams,” he told attendees and those watching the session online. “Today, that’s approaching 80%. By 2030, for all practical purposes, it will be 100%.”

But “there’s not a single answer to the right team structure, roles or skills” that will be involved, he said. Clients just “simply expect and deserve more than a sole practitioner can practically provide” to them, he added.

Prediction or Mandate?

Merrill’s move to have more of its brokers be part of teams “makes sense from a client service point of view” because it stands to translate into “better service levels,” provides backup, and allows for “specialization” of roles within a team and more options matching advisors with clients, according to Andy Tasnady, managing partner of Tasnady Associates.

But some advisors “will still prefer [working] solo” and, as a result, “they may need to move on at some point” if that is no longer allowed, he told ThinkAdvisor on Friday.

The “teaming” trend is not new, according to Danny Sarch, president of Leitner Sarch Consultants, who noted it “has been encouraged for at least 10 years.” Companies have “put incentives to team creation into their compensation plans for several years too,” he added.

Similarly, Diamond Consultants has been “certainly aware that firms, including Merrill, have been encouraging teaming for years,” Jason Diamond, vice president of Diamond Consultants, told ThinkAdvisor. “But this is definitely the furthest we’ve seen any firm go.”

What’s “a little unclear to me [is] whether the comments were a prediction or a mandate” that all Merrill brokers become part of a team by 2030, Diamond said. That was not made clear by Sieg during his presentation.

“I think it’s a big distinction,” Diamond said. There are benefits to teams for the firms, clients and advisors, he said, noting that it provides greater scale for advisors and gives clients access to diverse points of view.

“But a mandate … will not feel good and that is, I think, what is likely to cause a strong reaction from advisors,” he said. “The reality is some advisors just prefer to be sole practitioners.”

The ‘Golden Age’ of Wealth Management

The other four “foundational” elements for the future of wealth management are: providing clients with a “truly complete product set” that serves as a “one-stop shop;” providing a fully integrated technology platform that gives easy access to services, including self-service when needed; offering a “truly customized set of investment solutions” and offering “diversity of people and perspectives,” Sieg said.

Of the latter, he said: “If you want your advisor demographics to look anything like America by 2030, you need to change your hiring and development programs pretty much yesterday.”

Of the overall market, he said: “In my view, the bull market for advice is not only alive and well. The role of the advisor will be more vital as we go forward than ever before.” As an industry, everybody needs to make the most of that future, he said.

Clients are asking for four key things of advisors repeatedly, he said: to simplify things, make sure they are on track with their goals, that advisors “watch our back” as curveballs are thrown and unexpected events happen, and that advisors know what makes them tick (that they understand what matters most to them and what keeps them up at night), he explained.

“If we deliver on these: every client, every day, we are heading into the golden age of wealth management for clients, advisors and our firms,” he said. “Is it achievable? Absolutely.”

Advisors have done a great job over the last two years putting the news headlines in perspective, keeping their clients on track with their goals and “investing with discipline” at Merrill and other firms, he also said.

“There is no doubt we’re in turbulent times,” he conceded. “Just as we’ve been emerging from the pandemic, new challenges appear: The war in Ukraine, accelerating inflation, energy concerns, the potential for threats to global food supply.”

As a result, he said: “Predictably, some are now saying the bull market has run its course. Talking heads are ready to throw in the towel on asset allocation. ‘This time it’s different,’ they say.”

But, he added: “We’ve been here before: a moment when it is unfashionable to be bullish. But, if history has taught us anything, it’s that pessimists may be right at any given moment but optimists carry the day over the long run, and count me, Merrill and the rest of us at Bank of America among the optimists.”