Bank of America’s wealth management unit lost 423 advisors in the second quarter. Despite its attrition, the business unit raked in record assets under management, asset management fees and new clients.
BofA’s advisor headcount, which includes advisors in the private bank, the consumer investments business and Merrill Lynch Wealth Management, was at 19,385 at the end of the second quarter, down 2% sequentially, according to its earnings results released on Wednesday.
The number of advisors has been on a decline since the second quarter of last year when the headcount peaked at 20,622 advisors. Year over year, the firm lost 1,237 advisors, or 6.4% of its headcount.
The company attributed the decline to “slower hiring” into its financial advisor development program and the small number of trainees who opted to discontinue the program. A senior executive said the company was “encouraging them to accept other positions within the company.”
BofA expects hiring to speed up in the second half of the year, but the growth rate will be in the single digits. The firm expects that to continue over the next five years. So far, BofA has hired minimally through its accelerated growth program for early career advisors and its community markets program for underserved areas outside of well-populated regions. The company said the programs pulled in 65 total advisors in the second quarter, increasing the headcount to 120 and surpassing its numbers in 2019 and 2020. In its private bank, advisor count is almost doubling in the Florida market; it added seven advisors, boosting the number to 26 from 19 advisors.
BofA did not comment on the number of advisors it shed over the past several quarters.
In May, Merrill revealed details about its new advisor development training program, which now includes a ban on cold-calling and a shorter period to complete the program, from 36 to 18 months.
Assets in the wealth management business have been growing. The company reported a total of $4.1 trillion in client balances across its wealth management businesses.
At Merrill Lynch, client balances hit $3.1 trillion, up 25% year-over year. Assets under management balances ticked up from $1.1 trillion to $1.2 trillion quarter-over-quarter. Revenue increased by 16% year-over-year to $4.3 billion, and Merrill’s net income was approximately $1 billion, the highest seen in the past six quarters.
“The results underscore our scale and momentum,” the senior executive said.
Merrill added nearly 6,000 net new households in the second quarter, bringing it to 12,400 new households for the first half of the year. The average client household sits at $1.4 million.
The company said the drivers behind its record increases involve its ability to digitize the client experience and develop better technology. In the second quarter it removed paper from the onboarding experience, confident that the ever-growing number of clients choosing more digital experiences with its services wouldn’t mind. Eighty percent of its clients use its digital services at various capacities ranging from depositing checks to communicating with an advisor.
Last year, it launched a planning tool called personal wealth analysis that supports one-on-one sessions with advisors and connects to ML One. Since its adoption, advisors held around 340,000 planning conversations with clients, up from 300,000 last year. The program helped usher in $3 billion in the second quarter and $10 billion since its launch.
“We invested well over $3 billion a year in incremental technology advancements for advisors to deliver in even the most unpredictable environments,” said the senior exec.
The company also announced that it would return to the office at full capacity by the end of July. Right now, 80% of employees are working in the office.