Merrill Lynch will continue to close more private client offices in order to slash costs, according to James Gorman, president of the firm's U.S. private client group.
Merrill closed an estimated 30 small private client offices in the U.S. last year, and it will close about 10 more this year, Gorman said at the UBS Warburg's financial services conference at The Grand Hyatt in New York on Monday.
“It’s no secret the company is slashing costs wherever it can; it’s been doing it for a while now," says a Merrill broker on the East Coast. "So nothing is surprising to us anymore; there isn’t a group in the company is safe. We expect more [cost cuts].”
Merrill has been reducing costs in all its businesses. On the private client side of its business, Merrill has trimmed the number of branch managers from 180 to 140 and reduced the number of call centers from three to two, according to Gorman.
Gorman also said in his presentation that:
-- Merrill has 200 Private Wealth Advisors who average $1 billion in managed assets, and that the firm will continue its robust growth in this area;
-- The firm has 14,000 Wealth Management Advisors who each average $85 million in assets.
Gorman also said that “change is a way of life” in the private client group, adding that brokers will receive reduced payments for writing “small tickets” and no payment at all on transactional business with “small” households. He also said the FA training program is being revamped.