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Merrill Transforms FAs' Client Communications Tactics

By Miriam Rozen January 20, 2021

The coronavirus pandemic prompted changes in the ways Merrill Lynch financial advisors and trainees connected with clients and prospects last year, but some changes were intentional and strategic, according to a senior executive at the wirehouse.

Because of the recent surge in Covid-19 infections, Merrill’s management currently bars FAs from meeting clients face to face, unless they get a waiver to that rule from a manager, the executive told reporters after the wirehouse’s parent Bank of America released its fourth quarter earnings results.

“In most parts of the country right now, we are fully remote,” he said.

Advisors’ video calls increased significantly last year, the executive said. From 2019 to 2020, the number of client meetings via WebEx video conferencing conducted by Merrill FAs increased by fivefold to 375,000, he said.

All told, the changes in FAs’ client communication patterns have not led to accelerated growth in Merrill’s net new households. From 2019 to 2020, Merrill’s net new household growth dropped from 35,000 to 22,000, the executive said.

“Inherently, the wealth management business is a face-to-face business,” BofA CEO Brian Moynihan said yesterday when discussing Merrill’s net new household numbers during his earnings call with analysts and media.

The intentional and strategic changes included Merrill’s move away from the previously common practice of having its financial advisor trainees engage in cold calling of prospective clients, the same executive said.

Merrill has paused its FA trainees’ cold calling since August. Since then, the wirehouse has redirected the attention of its trainees from “all outbound prospecting activities” to additional training on new technology and processes.

“We are going to be in [a] position to very successfully develop new advisors with far less reliance on cold prospecting via phone calls,” the executive said.

“You’ll see that we will have little to no reliance on traditional cold calling [and that] is part of our growth strategy going forward,” he added. “That’s kind of where we’re going.”

Merrill will unveil in the coming weeks the details of a new advisory development program for its more than 3,500 trainees, the executive said.

BofA reported that noninterest expenses for its wealth management units were up to $3.561 billion, an increase of 1% compared with the fourth quarter of 2019 "mainly driven by investments in primary sales professionals."

The Merrill senior executive said the increase in expenses included higher compensation for FA trainees and some 500 wealth management bankers that the firm hired — mostly last year — who are tasked with providing concierge banking services to clients of the wirehouse’s FAs.

Saying goodbye to cold calling

When Merrill initiated the pause, performance goal deadlines were postponed to ensure “no negative impact” on trainees’ compensation, a spokesperson said in August. The deadline postponements will continue, the senior executive said yesterday.

When Merrill trainees make cold calls, they must comply “with various state and federal laws, which generally require that we add people to our Do Not Call list if they specifically make such a request or ask not to be called again,” the spokesperson said in September.

The Do Not Call list is a registry for consumers who do not want telemarketers to call them. The list is maintained by the Federal Trade Commission. Telemarketers who call people on the list may be subject to fines of up to $43,280 per violation, and each call may be considered a separate violation, according to the FTC website.

In late September 2020, the wirehouse announced a reorganization of the executives who oversee advisor training at the bank and Merrill. At that time, the bank appointed Matt Gellene and Eric Schimpf to co-head advisor development across the company.

Gellene — who was head of consumer client management, consumer banking, and investments at BofA — reports to Aron Levine, BofA's president of preferred and consumer banking and investments. Schimpf — who was Merrill’s Southeast regional director and managing director of community markets — reports to Andy Sieg, president of Merrill Lynch Wealth Management.

In tandem with Schimpf’s promotion, Merrill announced its creation of a new Advisory Division to be led by him and from which he would oversee all entry points for incoming FAs, the company said.

Gellene and Schimpf were also assigned to make decisions about how cold calling fit into advisor training, the company said at the time.

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