When Merrill Lynch announced that it would replace James Gorman, head of the firm's brokerage group, with his boss, Robert McCann, tongues wagged: Was Gorman simply moved into a sinecure? Put out to pasture? Or was he moved into a real post with real responsibilities?
Merrill spokespersons bristle at the question. Gorman, who has been president of Merrill's Global Private Client group since 2003, will fill the newly created position of executive vice president of corporate acquisitions, strategy and research, a real job with real responsibilities, they say.
Merrill declined to comment on what exactly Gorman will be doing in the new role, or what kinds of acquisitions the firm is interested in making. But Gorman himself said in January that Merrill expects consolidation in the retail brokerage industry, and is looking for expansion opportunities in the U.S. and abroad.
A Real Job
Industry veterans and Merrill employees agree that, yes, Gorman was actually given a new challenge and is not being forced into a quasi-early retirement. “Gorman's finally got something that he's better at,” says one former employee, who in his new job remains in close contact with former colleagues. Although respected, Gorman, who put the Total Merrill stamp on the brokerage unit, was not an especially popular manager, having come over to Merrill from McKinsey, the consulting firm. Brokers felt he didn't understand their business, having never been one of them. McCann, on the other hand, has more credibility with advisors, in part because of his long tenure at the company; he joined Merrill in 1982.
“From an FA-sales-force kind of position, everyone is just nothing but tickled pink to have [McCann] running our side of the business,” says one Merrill FA, based in Pennsylvania, who spoke on the condition that his name not be printed. “Nobody was unhappy with James' leadership role, but likewise we're not going to be unhappy that he leaves because they've brought in McCann.”