Is any industries timing any worse?
Fire people at dow 6500…
February 09, 2010
Merrill Lynch Building Up Broker-Training Program
(Dow Jones) Bank of America Corp.'s Merrill Lynch plans to inject some new blood into its brokerage force with hundreds of rookies this year. With a new head of its financial advisor-training program, Practice Management Development, or PMD, Merrill is ramping up its pipeline for new talent, amid a potential boost in its overall broker headcount.
The Financial Times has reported that Bank of America is targeting a 2,000-broker increase at Merrill’s thundering herd of 15,000 advisors. Such a boost would bring Merrill closer to its main rival, Morgan Stanley Smith Barney, which boasts some 18,100 advisors.
A Merrill Lynch spokeswoman declined to comment specifically on the reported plan to increase Merrill’s broker count, saying “the bulk of our investments in our business are in capabilities for clients and existing advisors.” She added that the firm looks to "add quality advisors and bankers, in particular through our training program."
It’s likely that any increase in Merrill’s headcount would come from adding not only trainees, but experienced advisors, which the firm has actively courted again since last spring. The firm offers some top-tier brokers 120% of their annual production to join Merrill Lynch from a rival.
Still, for Merrill and its brokerage rivals, training programs are launching pads for many advisors, some of whom will become top-producers in the future.
“Of all the firms, Merrill has been the most organically grown,” said Bill Willis, chief executive of Willis Consulting, a recruiting firm focused on the financial services industry. Mark Benson, head of the U.S. Advisory Practice Management Development program for Merrill Lynch, said in an interview, "if you look at the revenue for the advisory force, 80% is from financial advisors who were trained or hired at the firm."
Benson became head of PMD in August, after a nine-year career at Bank of America. He recently was head of Bank of America Investment Services, which was integrated with Merrill Lynch at the end of October. Benson says PMD is well regarded throughout the brokerage industry as it’s "the longest running training program on Wall Street, since the 1940s."
Advisors in PMD must complete a roughly 42-month program, in which they take part in various online courses and webinars as well as in-house training. Within that time, brokers spend 36 months in a production phase, where they are evaluated, in part, on how much they produce.
Merrill has shortened the duration of the overall program, Benson says, but at the same time, increased its content. This change gives trainees more time to complete additional testing and other assessments, he said.
The increased focus on trainees at Merrill is in sharp contrast to the hard times that rookie brokers faced in the industry in late 2008. A plunging stock market made it difficult for these advisors to meet production goals, and many were laid off as their firms cut costs.
Benson says Merrill is committed to giving trainees, many of whom are second-career professionals, the best chance to succeed from “peer-to-peer mentoring” with experienced advisers. Rookie brokers also have the option to join a team of veterans, which eases in their transition to the industry.
In additional to Merrill, other firms, including Wells Fargo & Co., are putting a renewed focus on training and developing new advisors. A Wells Fargo Advisors spokeswoman says the firm is expecting 40% of the new advisors to be hired to join teams and 60% to build their own book, adding, “our average trainee has 16 years of professional experience.” She says Wells Fargo added 1,240 new financial advisors, or those with under five years of experience, in the last five years.
A Morgan Stanley Smith Barney spokeswoman reiterated comments from Morgan Stanley Chief Executive James Gorman at a recent investor presentation. Gorman said the brokerage expects to have 17,500 to 18,500 brokers this year, with a training program to support that range.
What a joke. Hire them and fire them. Like cattle in a pen. Round them up, get all the relatives accounts in 2 years (including all checking accounts), fire them and pass the assets to the outside offices. Organic growth people!
12 months ago they couldn’t fire this group of newbies fast enough