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Broker Report Card 2010. Merrill Lynch: A Smooth Ride

Merrill Lynch rivals, particularly independent firms, still take swipes at the Thundering Herd's well-publicized difficulties of two years ago, but the fact is that the Bank of America unit is doing just fine these days, thank you very much.

Merrill's integration with the bank has been relatively painless; pre-tax operating income of over $2 billion for the first three quarters is nearly double that of the same period last year; and there is stability at the top with Brian Moynihan now heading the parent company and Sallie Krawcheck overseeing the advisors.

Merrill's report card scores reflect the relative calm two years on: nine out of 10 respondents said they were likely to be working at Merrill two years from now, and advisors gave Merrill's investment products and research high marks.

Cross-selling and leveraging BofA's resources are also paying off for some. One happy Merrill advisor reports bagging a $25 million relationship as a result of a lead from the bank side of the business. And advisors who were surveyed rated access to in-house investing, estate planning and wealth management experts among the best in the business.

There are a few bumps in the road, of course. Last year, 78 percent of respondents said Merrill was the best wirehouse to work for, good for second-best in the industry, while this year that number slipped to 71 percent, placing the firm fourth.

Respondents also gave Merrill slightly lower scores for compensation and benefits as well as public image and morale. In fact, “the compensation plan for larger producers is excellent,” one advisor said. “The complaints are coming from the least productive advisors, not the more productive advisors.” As for image, “the problems in the business have been about the markets, not about BofA,” the advisor declared.

Share price (23 Nov): $11.09
Pre-tax operating income Q1-3: $2.075bn
Net revenue Q1-3: $12.5bn
Total Client AUM (9/30/10): $624bn
Net new client assets, Q3: ($1.4bn net outflow)
Number of advisors, Q3: 15,340
Average annualized production per advisor, Q3: $841,000
Average AUM per advisor: N/A
*With the exception of # of advisors, these are Global Wealth & Investment Management (which includes Merrill Lynch, U.S. Trust, and Retirement & Philanthropic Services)

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