Merrill brokerage force down from a year ago — but assets have risen

The financial adviser head count at Bank of America Merrill Lynch stood at 15,005 at the end of March, down 5% from a year earlier and flat with the end of 2009. Even though its numbers are fewer, Merrill attracted more accounts from wealthy households, Bank of America said Friday as it reported first-quarter earnings. Merrill's brokers added 5,702 net new accounts from households with at least $250,000 in assets during the first three months of the year, up from 3,242 in the fourth quarter of 2009 and a net loss of 858 such accounts in the troubled first quarter of 2009. Wealthy households are, of course, a key metric for large brokerage firms, which discourage brokers from courting small investors. Merrill Lynch sends most accounts with combined brokerage and banking assets under $250,000 to its customer call unit, which it dubs the Financial Advisory Center. Overall, BofA's performance exceeded analysts' estimates. First-quarter net income was $3.18 billion, or 28 cents a share —the bank's first profit since the second quarter of 2009. Analysts surveyed by Bloomberg expected earnings, on average, to come in at around 10 cents a share. Earnings at Bank of America's global wealth and investment management division, which includes 4,430 “client-facing” advisers in other bank and asset management units, fell to $497 million. That's a 62% drop in the unit's profit in the fourth quarter of 2009. The bank said growing asset-management revenue from rising markets and higher sales of wrap products was offset by lower brokerage income and outflows from cash products at the bank's Columbia Asset Management unit. Like other retail asset managers, the bank also has been waiving fees on money-market funds. Compared with the first quarter of 2009, net income in the division inched up 3.8%. Revenue of $3.03 billion for the division was about flat with the fourth quarter of 2009 and up from $2.96 billion one year earlier. Non-interest expense of $3.37 billion was also flat with the fourth quarter and up $52 million from a year earlier. Sallie Krawcheck, head of the bank's global wealth and investment management unit, said earlier this year that the attrition of top brokers in the aftermath of Merrill's January 2009 takeover by Bank of America had ebbed as time passed. The number of departures in the fourth quarter of 2009 was at a record low, she said, and the bank today reported a net loss of just one financial adviser since the end of last year. Total client-facing associates, dominated by the Merrill force, oversaw 3.1 million accounts as of March 31, about flat with yearend and down from 3.3 million one year earlier. Their assets under management of $750.7 billion inched up from $749.8 billion three months earlier but were up $53.4 million, or 7.6%, from a year earlier.