On Recruiting

Sarch: Are Merrill Lynch advisers nervous about Bank of America?

Jun 6, 2011 @ 9:28 am

By Danny Sarch

September 15, 2011 will be the three year anniversary of when Bank of America (BAC) announced it was buying Merrill Lynch (MER). It's been well documented in many post-crisis books how the fiercely independent brokerage firm, crippled by losses in securitized mortgages, was forced to sell out to the always acquisitive BAC. Two and a half years after the close of the transaction, who is rescuing whom?

Merrill Advisers tell me that they were worried that the famously HR-centric culture of BAC would soon eclipse, if not just dominate, the old Merrill Lynch culture. Indeed, there are many stories of heavy handed memos and policies going into the field. One Adviser told me: “It seems like every policy change or HR memo has an implicit threat of termination if we don't obey. “ He then used a Star Trek analogy: “You will be assimilated. Resistance is futile.”

That said, Merrill Advisers were given some quick wins. Within months, Advisers had a tab on their desktop that enabled them to see any and all of their clients' B of A monies, from checking and savings accounts, to HELOCs, mortgages and credit cards. Merrill Lynch clients with more than $1 million in assets with the firm are given a substantive discount on a B of A mortgage. And by all accounts, B of A is much better at transacting mortgages than Merrill ever was (after all, Countrywide gave a mortgage to anyone with a pulse!). Finally, there were leads given out to Merrill Advisers, generated from B of A bankers. Very cool.

On the other hand, many Advisers, and indeed their assistants (called “CAs”), are often “encouraged” to cross-sell B of A products to Merrill Lynch clients. These CAs have been given training on how to approach clients about B of A products. For example, clients are often asked about opening up a Bank of America checking account and a new credit card. Merrill Lynch invented the CMA, of course, many years ago, bringing checking account functionality and convenience to the brokerage world. One Merrill Lynch client whom I met socially asked me: “Why the hell do I need a B of A checking account when a CMA does the same thing?” Good question. The very same client, however, loves the “cool factor” of the co-branded Merrill Lynch/American Express black card that his Adviser encouraged him to get. The best Complex Managers within the Merrill system are clearly shielding their biggest producers from the HR oppression as well as any cross selling pressure. Lesser producers are not as fortunate.

The Big Elephant in the Room, however, remains the bad mortgages which remain on the BAC books. Their stock price languishes, as I write this, just north of $11. Do not underestimate the scars of three years ago, when Advisers watched their wealth accumulated in MER evaporate. As news of foreclosures continues to populate the business headlines, BAC and Wells Fargo are undergoing credit reviews. Ironically, perhaps it is the legacy of Merrill Lynch that is now bringing stability to BAC. At what stock price will the backbone of the Merrill Lynch franchise, “the thundering herd”, seek greener pastures, rather than watch the possibility of history repeating itself?


What do you think?

View comments

Recommended for you

Sponsored financial news

Use arjuna-design' to find exclusive information and intelligence about the independent broker-dealer industry.

Rank Broker-dealers by

We are about to enter the next chapter for exchange-traded funds. What do investors expect? What do advisers wants? Jillian DelSignore of JPMorgan Asset Management offers her perspective.

Video Spotlight

Recommended Video


Latest news & opinion

Super Bowl of financial scams that hit NFL players

Big paychecks often attract unscrupulous financial advisers to the National Football League, resulting in a long list of high-profile financial implosions, many of which end up in court.

Funds that missed the January rally some by a little and some by a lot

Here are 10 funds that whiffed when at bat against the S&P 500 index, and why they struck out.

LPL Financial signs up 953 NPH advisers and $34.4 billion in assets

Broker-dealer says it is on track to bring over 70% of NPH revenue as part of its acquisition.

Treasury market pummeled in its worst January since 2009

'Melt-up' of yields pushes 10-year to 2.74%, its highest level since 2014

These funds have gained more than 10% in just a month

And not all of the funds did it with tech stocks


Hi! Glad you're here and we hope you like all the great work we do here at arjuna-design. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting arjuna-design.com? It'll help us continue to serve you.

Yes, show me how to whitelist arjuna-design.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Last News

turbotax state cost turbotax packages merrill lynch ascensus nasdx franklin templeton growth allocation td bank ameritrade deadline for roth ira 2014 fica limit for wages mass teachers retirement calculator high cash value whole life insurance vanguard target retirement 2025 fund morgan stanley terms and conditions of withdrawal american funds investment company of america a the ultimate buy and hold strategy federated international strategic value dividend fund county of los angeles deferred compensation and thrift plan horizons what is maximum percentage contribution for 401k life insurance with long term care rider john hancock new hampshire bureau of securities regulation stone harbor emerging markets debt fund collecting social security from ex husband invesco group trust for retirement savings direct rollover vs transfer van eck gold fund generation x and baby boomers how much does a financial professional associate make at prudential vanguard target retirement 2050 inv allied interstate inc phone number turbo tax price increase edward jones fee structure roth ira tax forms what is the penalty for 401k hardship withdrawal top s&p 500 index funds 529 savings plan ny american funds europacific growth fund r5 jpmorgan chase wealth management