By Michael Wursthorn
Merrill Lynch wants its herd thundering again.
Bank of America Corp.'s brokerage arm is thinning some of its
executive ranks and shuffling others in an effort to get brokers
collecting more assets and producing more revenue, according to a
memorandum viewed by The Wall Street Journal.
Merrill head Andy Sieg, who is roughly three months into his
tenure, told the firm's more than 14,500 brokers that the goal is
to get Merrill to "operate more effectively as a business,"
according the memo. "Our shared objective is to make the
organization feel like a smaller, more tightly integrated
firm."
To that end, Merrill will cut the number of divisions its
brokers work within across the U.S. from 10 to six. The divisions
are being rejiggered to include a broader swath of markets and
brokers, giving some division executives new or bigger territories
to oversee, while others will retire, leave the firm or transition
into new roles.
The changes won't lower the number of financial advisers Merrill
fields, a person familiar with the matter said, who added the
restructuring isn't aimed at reducing costs or head count.
The division executives, who act as a link between Mr. Sieg and
the market executives overseeing brokerage branches, include Bill
Lorenz in the Northeast, Eric Schimpf in the Southeast, Paul
Lambert, who will focus on the Midwest and Jeff Markham in the
Western division. Mr. Sieg also promoted market executives Lindsay
DeNardo Hans and Vince Fertitta to oversee the Mid-Atlantic and
Texas Mountain South divisions, respectively.
Former division executives Don Plaus and Ben Prince are being
reassigned, the memo says. Mr. Plaus will run Merrill's elite
ultra-high-networth client group known as that Private Banking and
Investing Group, a role recently vacated by Mr. Sieg's brother Phil
Sieg. Meanwhile, Ben Prince has been asked to determine a strategy
to reinvigorate more than 150 smaller Merrill offices that are
understaffed in some cases.
Linda Houston, who was the division executive of Merrill's New
England operations, will retire, while Jeffrey Tucker, division
executive of the New York City region, will be reassigned to a role
yet-to-be announced.
The restructuring comes less than three months into Mr. Sieg's
tenure as head of Merrill Lynch. Shake-ups among the executive
ranks tend to follow regime changes at brokerages, with Wells Fargo
& Co., Morgan Stanley and UBS Group AG following through on
similar exercises the past 12 months.
The changes, in some ways, mirror rival UBS's shake-up last
summer, when it undertook a broad reorganization to better empower
branch managers to make decisions. Like Merrill, UBS cut a layer of
management, reduced the number of "complexes," or groups of
branches, and increased the overall number of branches.
Like UBS, Merrill wants its lower-level executives to be in a
position to make more decisions with their markets and broker
branches without having to involve divisional executives or Mr.
Sieg's management team, people familiar with the matter said.
But while UBS's reorganization also included a pullback from
recruiting experienced brokers, Merrill is considering hiring even
more brokers and support staff in certain underperforming
markets.
Mr. Prince, a 22-year veteran of Merrill, is tasked with
figuring out how to grow about 150 Merrill offices that haven't
been replenished since brokers left in recent years. The markets
aren't your atypical Merrill branch serving big-city investors with
millions of dollars to invest. Instead, they are mostly in "Main
Street" communities already served by regional brokerages like
Edward Jones and Raymond James Financial Inc., one of the people
familiar said.
Mr. Sieg said those branches represent a "significant market
opportunity, " according to the memo.
Mr. Sieg and his team now face the formidable challenge of
continuing to execute on Merrill's ambitious plan to mostly work
with retirement savers in accounts that charge a fee based on a
percentage of assets and where brokers are held to a "fiduciary"
standard of care. The firm decided it would mostly ditch
commissions in retirement accounts to avoid the more onerous
aspects of the Labor Department's fiduciary rule, which now faces a
delay.
Converting more of Merrill's commission-paying clients into
accounts that charge a fee has brought on more work for brokers,
current employees say. The added work involves more brokers meeting
with more clients and keeping thorough notes on their financial
well-being to create financial plans, taking time away from their
ability to find fresh assets.
Of Mr. Sieg's other executive changes, he has tasked Mike
Adornetto, formerly a managing director who handled the bank's
treasury products, with helping brokers focus on asset harvesting
and less on paperwork. Mr. Adornetto, as Merrill's chief operating
officer, will oversee the firm's more than 6,500 client associates,
desktop technology for brokers, as well as the firm's online and
mobile strategy, the memo said.
Other executive changes include naming Hong Ogle, a market
executive, as head of adviser development, where she will manage
Merrill's training program, while Kirstin Hill, a 20-year Merrill
executive, has been named strategic performance executive,
overseeing broker compensation and developing metrics to gauge
market growth, among other matters.
Write to Michael Wursthorn at Michael.Wursthorn@wsj.com
(END) Dow Jones Newswires
March 29, 2017 18:03 ET (22:03 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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