Life continues to get more complicated for Merrill Lynch advisers operating under the umbrella of beleaguered parent Bank of America Corp.
With the ouster of Sallie Krawcheck as head of the bank's Global Wealth Management division, The Thundering Herd now comes under the authority of David Darnell, a commercial banker who as co-chief operating officer, will be responsible for “those businesses serving individual customers and clients,” according to the bank. That will include, among other things, deposits, credit cards, home mortgages and small business services, along with wealth management. Tom Montag, a former Merrill executive, will serve as the other COO and will be responsible for corporate and institutional clients.
Ms. Krawcheck's departure didn't make a big impression on one Merrill adviser, who asked not to be identified. “I'm not sure she was the broker advocate she was made out to be,” the adviser said. “The downside [of Mr. Darnell] is that he's a banker. If he plans on putting more pressure on us to sell banking products, people will leave.”
Mr. Darnell has been speaking with advisers today on conference calls, assuring them that that will not be the case, and that there will be no changes to the way Merrill advisers are currently compensated, according to one source. A shift to a banklike structure of salaries and bonuses as opposed to fees and commissions would lead to departures.
“If any decisions are made that impact advisers' ability to service their clients or that impacts their compensation, it will cause an exodus,” predicted recruiter Mindy Diamond of Diamond Consultants LLC.
With Ms. Krawcheck out of the picture, John Thiel, the recently appointed head of BofA's U.S. brokerage operations, becomes all the more important to the 16,000 or so Merrill advisers, suggested Alois Pirker, a senior analyst with Aite Group LLC.
“I don't think the bank would have made this move if John Thiel hadn't been there,” said Mr. Pirker. “He'll likely have a lot more responsibility and he'll need to fight for the agenda of the advisers.”
Merrill brokers may be content to wait and see what the management shuffle will mean for them. “I like my life and I don't want to mess it up. I'm going to see how this plays out,” the adviser said.
Another adviser questioned whether the grass is any greener at the other wirehouses. “Where would we go that doesn't have the same type of problems?” the adviser said. “The noise is what it is. I just take care of my clients.”
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