Merrill Lynch, famous for its seemingly continual reorganizations, is at it again.
According to two different sources, the firm is changing the branch management structure of its retail system. Specifically, the firm is cutting in half the number of its regional directors, reducing the number to five from 10, say the sources. The five being cut have not been fired, but moved into other positions, say the sources. Two of the five demoted directors were rumored to be in Connecticut and California. Merrill Lynch declined to comment.
Why is the shake-up happening now? “It’s cost-cutting, they basically want less people running more offices,” says one of Merrill’s top producers in its private banking and investment group. Is the restructuring a good idea? One former Merrill branch manager says it comes with the territory: “New management always has to justify their life.”
Dan Sontag, senior vice president and head of the advisory division, is said to be in charge of the change in management strategy. All branch office managers report to him, says a source. Sontag, in turn, reports to Mac Gardner, senior vice president and head of the global private client group’s Americas region. Gardner reports to Bob McCann, who, as vice chairman, oversees the wealth management group worldwide, which includes the global private client group. McCann took responsibility for the global private client group in June from James Gorman, who is now head of corporate acquisitions, strategy and research. Gorman has since agreed to run Morgan Stanley’s retail brokerage.
“It’s funny,” says the former branch manager, “if you pulled out the 1992 reorg chart, this would look exactly like it." There will now be four regional directors in the U.S. and one in Latin America.
“There’s more turmoil and turnover [now] than in the 20-plus years I’ve been around the firm,” he says.