Merrill Lynch is reorganizing its retail sales force into three distinct categories:
Financial Advisors, for those serving investors with less than $1 million (the old Financial Consultant title will be phased out);
Wealth Management Advisors, for reps with clients who have $1 million to $10 million; and
Private Wealth Advisors, exclusively for those with clients holding $10 million or more at Merrill.
Retail President Stanley O'Neal unveiled the new three-tier structure during a conference for analysts and the investment community on March 12. “Our objective is to gain market share in every segment, especially at the high end,” O'Neal said.
After the announcement, Merrill brokers were left scratching their heads. “It's a lot of semantics with no specifics,” says a producer in the Northeast. “How will all this be implemented? What are they going to do if I fall into the Financial Advisor category? Take away my $2 million accounts?”
Merrill's Wealth Management Services Group (WMSG) provides back-office support and investment expertise for brokers serving clients with $10 million. WMSG Executive Director Doris Meister told reporters at a March 1 press gathering that the ranks of Private Wealth Advisors will be expanded in the next several years, moving from 125 brokers currently to about 300 to 500 reps.
The firm has already announced plans to open an office in Century City, Calif., staffed by Private Wealth Advisors.
“We see the potential for that in other cities where there is a density of wealth,” Meister told Registered Representative at the gathering.
Private Wealth Advisors are typically part of teams who have shown an ability to serve ultra-wealthy clients, according to Meister. They undergo a “rigorous accreditation program” offered by the firm, she said.
Merrill has also beefed up the training offered to brokers interested in serving investors with $1 million or more. It will be granting the internal designations of Wealth Management Advisor and Private Wealth Advisor for producers who complete the training, which includes courses on estate planning, trusts, philanthropic services, derivatives and concentrated stock strategies.
The firm formed a five-person support group in New York called the Concentrated Stock Strategies Team in October 2000 to support clients with more than $25 million in a single stock. Usually, these investors hold large quantities of stock in a company they've worked for or taken public, Meister said.
Segmenting Small-Fry Clients
Despite its emphasis on high-net-worth investors, Merrill Lynch is not abandoning its smaller clients, said Stanley O'Neal, Merrill's retail president, at a March investor meeting.
“Nothing could be further from the truth,” O'Neal said. “We're serving different segments in different ways.”
Smaller clients will be served by call-center brokers located in Hopewell, N.J., and Jacksonville, Fla. Clients with $20,000 in assets will receive two telephone calls a year from brokers to review their portfolios, and clients with $50,000 or more will be advised by a “dedicated team” of service reps, O'Neal said.
Formerly known as the Investor Services Group, the service for smaller clients has been renamed Merrill Lynch Financial Advisory Center.
The firm hopes to triple the number of call-center registered reps, bringing the total to 240. When assets grow, and a service-center client needs more personalized attention, Merrill will have a program to transition accounts to brokers in the branches, O'Neal said.
The firm will move about 500,000 existing accounts to the Financial Advisory Center this year, O'Neal said. “We're doing this through a district-by-district rollout,” and the firm is exceeding its targets so far, he said.