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Teamwork at Merrill

Jim Gorman hopes new technology and training will standardize the planning process without stifling individuality.

Merrill Lynch is committed to building a 21st century fee-based practice with teams of specialized reps, said Jim Gorman, head of Merrill's private client group. So if you're still operating a transaction-based business on a stand-alone basis, your choices are daily becoming more limited. “This business is too complex” for one person, Gorman said at a conference last month.

Selling the process of financial planning — rather than specific products — is good for the industry, but it has to be backed up by follow-through service, he said. “On average, it takes three to six months to introduce relationships, but our relationships, on average, last 10 years,” Gorman said. “Which means only 1/20th to 1/40th of our time is spent selling.”

Merrill is rolling out a new generation of Web-based workstations to help consultants assess risk tolerance and modify asset allocations when clients' circumstances change. The new technology, in concert with extensive training, should make a financial advisor's advice “somewhat standardized,” Gorman said. “We need to take away some of the randomness of advice without killing the entrepreneurial nature of advisors.”

In the past two years, Merrill's transaction revenues declined 21 percent, as asset-based revenue held reasonably steady, according to Gorman. Fee-based business as a percentage of brokerage business increased to 16.8 percent in the first quarter from 14.4 percent at the end of 2000.

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