Dan Sontag has replaced Robert McCann as head of Merrill Lynch’s brokerage unit. The announcement comes on the heels of McCann’s resignation yesterday, only days after the firm’s completed merger with Bank of America on New Year’s Day. Sontag was previously McCann’s second-in-command, head of Merrill’s global wealth management in the U.S. and Latin America.
What do FAs think of the announcements? Not much, it turns out—especially now that Sontag is McCann’s confirmed replacement. The possibility—however remote, since Sontag was rumored a shoe-in—of a Bank of America executive getting McCann’s job was the only worry. “Had that happened, that would have very bad for morale,” said one FA.
Still, the announcements resulted in little reaction among reps. “A guy in my office said to me, ‘Look, the stock is up now that McCann is gone,’” joked one of Merrill’s top-producing advisors in Florida.
Another described the reaction in his office as “literally a shrug of the shoulders.” Sontag’s ascendency to the top spot only got slightly more enthusiastic response. “He’s more of rah-rah type of guy,” said one. Another FA was pleased with the news, saying only that he thought Sontag was a better manager.
But that’s about as excited as brokers got, with the exception of the occasional parting shots like “good riddance.” As one FA explained: “Look, the 'thundering herd' is pretty ticked off right now, so there’s a lot of steam to blow off.”
In fact, more shocking to Merrill Lynch advisors than the sudden departure of their leader for the past five years is the disappearance of the “MER” logo from their computer screens as of January 2 and the implications of that. “Merrill Lynch is gone,” said one. “That’s what is tough to take,” he says.
While the 50-year-old McCann’s departure after 26 years at Merrill is a surprise, sort of, his future at the newly combined firm never seemed certain, and reps and other observers speculate he left because he didn’t get the job or the money he wanted.
Brokers that spoke with Registered Rep. today pointed out the confusing October 22 press release from Bank of America announcing the new firm’s leadership team—a combination of Merrill and BofA executives. The release said, “Bob McCann, vice chairman and president, will be head of the combined financial advisor organization.” Not only did McCann lack an official title in the release, he didn’t get the top job—leader of the global wealth and investment management; that was left to “be determined as the company works to define the target environment through the transition process.” In the words of one of Merrill’s top producers, a member of the elite private banking and investment group (PB&IG), “You knew he was dead that day.” Another said McCann clearly realized that day that there were too many roosters in the Merrill/BofA henhouse. Sontag is a 30-year veteran of Merrill Lynch and has climbed the management ladder from the branch level to the district level and up. He’s charming and politically savvy like McCann, an attribute he says both men used well to get to the top, said one FA.
In customary fashion, Thain saluted McCann for his work in a message to the firm. He thanked McCann for his 26-year career at the firm saying, “During a distinguished 26-year career with Merrill Lynch, Bob has been a significant contributor to the company and, in the face of extraordinary challenges, he provided strong leadership for our Global Wealth Management business. Since being named head of Global Wealth Management in 2003, Bob has developed a first-rate leadership team that has been able to deliver record results and lead the industry by almost every measure.”
But Merrill’s once dominant position in retail brokerage—both in terms of total client assets, average assets per advisor and average production per advisor—has been diminished significantly as peers Morgan Stanley, Smith Barney and UBS have closed those gaps. One former regional director said after reading the note: “I’d like to hear three or four examples of how he did that, I mean, relative to what? Merrill’s lead over those three firms has been reduced in the last three years.”