STT State Street Corporation

With the hiring of 280 more employees in Texas (60 hires) and Florida (220 hires), Bank of America Corporation (BAC) reached the goal to more than double the number of Financial Solution Advisors (FSAs) by the end of this year. Now, more than 1,200 people are working as FSAs across the country in the Merrill Edge Advisory Center.

This move bodes well with BofA’s overall strategy to improve solutions and guidance that are being provided to its ‘preferred customers’ with investable assets of $50,000 to $250,000. At present, BofA has nearly 8 million preferred customer accounts with an unmatched insight into their financial needs.

Preferred customers usually have investment and banking needs that are quite unique compared with other clients. Some of the top priorities of these preferred clients include access to both banking and investing solutions, better retirement plans and ability to track and manage their money.

So, with the hiring of the new FSAs, BofA intends to provide its preferred customers with better guidance and financial solutions. The preferred customers would not only get personal attention from a specialized FSA, but would also receive tailor-made solutions to their specific needs.

BofA stated that the FSAs would be located in all the major banking centers across the nation, including San Francisco, New York, Dallas, Houston, Charlotte, Los Angeles and Washington, D.C. These FSAs will also provide phone-based guidance to the clients.

Earlier in the year, BofA had initiated a ‘Platinum Privileges’ program to reward clients, who maintain $50,000 or more in investment or deposit balance, with more services. This program was first piloted in Arizona, Georgia and Massachusetts.

Following its success, the program was officially launched in nine states in September. Additionally, on Monday, BofA stated that this program is being further rolled out in eight states including Washington, D.C. The company plans to continue expanding this program in other states in 2012.

However, though the business is expanding, BofA is under pressure from the regulators to boost its capital levels and revive its profitability that has been bogged down by mortgage losses and increased legal costs. Hence, the company is looking to reduce 30,000 employees over the next few years and save nearly $5 billion in expenses annually by 2013 under the first phase of its ongoing cost-cutting initiative –– Project New BAC.

Charlotte Business Journal reported that BofA has already started giving out pink slips to an undisclosed number of employees at its headquarters in Charlotte, N.C. The report also states that the company has started layoffs in its technology and operations divisions.

BofA is not the only company which is trimming its workforce to lower operating expenses. Last week, the Wall Street Journal reported that Citigroup Inc. (C) is mulling over retrenching 3,000 workers as part of its cost containment measure. Moreover, in August, Bank of New York Mellon Corp (BK) stated that it will slash about 1,500 jobs, which represents about 3% of its total workforce. State Street Corp. (STT) also plans to let go 850 technology jobs through layoffs and outsourcing.

Overall, until revenue generation revives, a hideous cost-to-income ratio will continue to force many more banks to reduce costs through job cuts as they need to maximize profits in order to boost capital ratios. However, BofA’s decision to hire a relatively small number of FSAs is expected to go a long way in creating new employment avenues in the country, which is reeling under high levels of unemployment and job cut announcements.

Currently, the shares of BofA retain a Zacks # 3 Rank, which translates into a short-term Hold rating.

 
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