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Andy Sieg Merrill Lynch
Andy Sieg

Merrill Lynch on Track to Add 47,000 Households in 2019, Sieg Says

Model portfolios, referrals from Merrill Edge and tapping into "overlap" with Bank of America's commercial unit were driving advisor efficiencies and bringing in record numbers of new clients.

Automating tasks saved financial advisors at Merrill Lynch a month's worth of work last year, freeing up more time for clients and helping drive the firm's growth, said Andy Sieg, the head of Merrill Lynch Wealth Management.

“We thought we were very aggressive in 2018 in saying that ‘we thought we could deliver automation solutions that could give you one month’s worth of time back in your practice,' and we more than delivered on that last year," Sieg said during a presentation at the Morgan Stanley Financials Conference Wednesday morning.

Gathering necessary information and preparing to meet a client for a review previously took an average of 40 minutes or more, but that process was cut down to 10 minutes or less last year. Even if an advisor met with each clients only once per year, that would amount to a considerable of time saved. Practices often have well over 100 clients.

More advisors are also choosing to use the model portfolios created by the firm's central investment office, rather than construct allocation models on their own, also saving a tremendous amount of time, Sieg said.

With that newfound time, advisors have gone out and continued to grow Bank of America's wealth management business. Annualized first quarter results put Merrill on track to add 47,000 new households in 2019, more than six times the 7,000 households added in 2017. The "net new household added per advisor" is now over four, and the average Merrill Lynch household now has about $1.4 million, Sieg said. Net new client growth per advisor is baked into the firm's compensation structure, with advisors punished if they don't bring in more than four new households, and given a bonus for bringing in six or more.

About 6,000 new Merrill Lynch clients, who have a dedicated advisor, came from Merrill Edge, the self-directed investment platform with $211 billion. They accounted for about 12% of the net new households in 2018. 

But Bank of America's commercial banking division has the greatest synergy with the Merrill Lynch, Sieg said. The global commercial bank serves one-in-three U.S. companies with revenues between $50 million and $100 billion.

“If I think about what is most center-of-the-plate and has the opportunity to deliver real scale benefits to the Merrill Lynch thundering herd, the commercial bank is the best illustration of this,” Sieg said. “That reach in the marketplace is very broad and it is a direct overlap of the client base of Merrill. Increasingly, our team and the commercial bank are jointly covering clients and that is a driver of new client acquisition for us.”

Sieg also led conference goers to believe that more automation is coming. He said the launch of Bank of America's virtual financial assistant, Erica, has been well-taken by its consumer banking customers and that “it doesn’t take a creative leap to see how that could apply to our wealth management clients."

The executive also said there are no singular, drastic advancements coming for advisors. Instead, there will continue to be small and medium-sized projects that collectively make a difference in their practices going forward.

Despite market headwinds, full-year revenue at Merrill Lynch rose to a record $15.9 billion in 2018, up $607 million or 4 percent year over year. The brokerage unit accounted for the majority of the $19.3 billion in revenue generated by the bank's Global Wealth and Investment Management, or GWIM.

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