On March 30, 2023, Lindsay Hans and Eric Schimpf were promoted to co-presidents of Merrill Lynch after Andy Sieg departed for Citibank. The two have continued to live out Sieg’s mandate from Brian Moynihan, move Merrill Lynch as swiftly as possible to a dominating private banking model. As an example, Hans and Schimpf pointed to the addition of “newbie” advisors, some from the fallout of SVB and FRB though all were private bankers. The firm remained at a net sequential loss of advisors of 144 as seasoned advisors continued to flee, replaced by young guns the firm trains to their liking. Many regard Hans and Schimpf as puppets for Brian Moynihan who has clearly called out wealth management for being the least profitable division of BOA, with a clear preference for the private bank.
Issues that were reported under Andy Sieg continue to occur.
- CEO Moynihan has called out Merrill Advisors publicly “as the least profitable division.” Investments and resources are going to the more profitable private bank, shareholder value is first priority.
- The culture at Merrill has continued to deteriorate with even the name being dismantled. The firm continues to divest from seasoned advisors in favor of young, inexperienced salary+ hires that it can train to do exactly what the firm feels is best for itself.
- There continues to be a hiring freeze at Merrill that commenced in 2022 and is uncertain to ever come back. An example of expenses being slashed with even existing assistant salaries being slowly cut too..
- Broker commissions have been cut to 25% and soon to be zero. Brokerage is an essential component of most any advisor in our industry for many varying reasons.
- Compliance and operations have taken over at the firm, advisors walk on eggshells and the amount of bureaucracy gets in the way of efficiently doing business, mired in red tape.
- Marketing has become equally hawkish, advisors report very long time periods to get anything accomplished that they want approved to bolster their business.
- Travel and expense accounts have been slashed either to next-to-nothing or to zero. Advisors will have to personally fund their business development.
- Bloomberg accounts have been cut off, again, advisors will have to fund those accounts personally.
- Institutionalizing investment management- Internal asset management is favored over allowing advisors to pick and choose managers, to be paid at 50% due to the risk and compliance and legal costs.
Last week, a major team in South Carolina left Merrill for a new home office in Columbia, South Carolina. The team had just had it with all the points mentioned above, and landed an insane deal from UBS who welcomed the opportunity to build an office just for the team, allowing them to do what they do best. It is truly weekly that advisors leave Merrill for other firms that invest in brokerage models with economic packages of upwards of 400% or to go fully independent through supported platforms, controlling their own expenses at 70% 1099 income and valued at 7-10X these earnings.
For extensive resources for Merrill advisors looking to assess their practice in consideration of a move, The Gershman Group has assembled this portal: https://thegershmangroup.com/merrill-lynch-pulse/. Advisors can also find there an article entitled, “Truth of Tea Leaves” outlining famous quotes by Andy Sieg that Hans and Schimpf have continued to live out, https://thegershmangroup.com/is-what-andy-sieg-says-the-truth-or-tea-leaves/.
When will enough be enough for the rest of the thundering herd?
As the Editor of The Gershman Group, a boutique financial services consulting firm, TGG brings expertise in financial analysis, strategic planning, and market research. With a keen eye for detail and a passion for helping businesses navigate complex financial landscapes, TGG delivers insightful, high-quality content to empower informed decisions. Backed by years of industry experience, TGG makes complex topics accessible through clear and compelling communication, shaping the firm’s thought leadership and commitment to excellence in financial services.
