September 22, 2021
Andy Sieg, Merrill Lynch Wealth Administration President
Merrill Lynch Wealth Administration introduced Wednesday one other spherical of coverage modifications as a part of its “Challenge Thunder” marketing campaign, which, to date, has not addressed any compensation points, regardless of persistent grousing amongst brokers about prior years’ haircuts to their pay.
However individually, Merrill President Andy Sieg sought to reassure brokers there can be few substantive modifications within the 2022 compensation plan that might nick their take-home pay.
Sieg informed brokers throughout a city corridor on Sept. 14 to not count on any “large-scale change” of their compensation plans for 2022, based on a recording of his remarks reviewed by AdvisorHub. The manager, who has led the Merrill brokerage since 2017, acknowledged the damaging response to modifications to their pay plan lately.
“You’ve felt them. You’ve been pissed off by some,” Sieg mentioned. “A number of laborious work, subsequently, is within the rear-view mirror. So that you’re going to see a a lot, a lot, a lot decrease degree of change.”
Any tweaks Merrill does make for 2022 can be specified by the agency’s annual compensation announcement to return in a “couple months,” Sieg mentioned, based on two inner sources conversant in his remarks.
A Merrill spokesperson declined to touch upon what modifications the agency might make or whether or not it might modify a number of the key targets in its “development grid” that penalizes and rewards brokers for including belongings.
For 2021, Merrill saved its grid hurdles, payouts and development necessities regular however eradicated pay on sub-$250,000 accounts.
In response to a dealer query on the city corridor, Sieg additionally reassured the agency’s gross sales drive that Merrill had no plans to eliminate the elemental compensation grid, which pays brokers a spread of between 34% and 50% of the income they generate.
“We’ve no plans–no intentions–to eliminate the grid. Full cease,” Sieg mentioned. “Anyone who calls you on the cellphone purporting to be your good friend and telling you they heard that, is mendacity to you. They’re mendacity to you. I can’t be extra clear.”
Sieg delivered his remarks on the city corridor whereas once more acknowledging the agency continues to wrestle with advisors leaving for the competitors.
“Advisor attrition proper now’s larger than we’d like,” Sieg mentioned. “It’s a subject now we have talked about. We’re coping with it.”
To that finish, Merrill on Wednesday moved on to the fourth installment of its “Challenge Thunder” marketing campaign geared toward assuaging dealer considerations. The tweaks, or what Merrill administration calls “wins,” this week embrace plans to:
- Replace the “Merrill One” advisory platform to permit brokers to enter a number of work orders on the similar time.
- Cut back turnaround occasions for shoppers who wish to be a part of guardian Financial institution of America’s donor-advised funds.
- Make extra lending specialists out there to brokers to assist their shoppers with mortgages.
The modifications develop a listing of what have to date been principally procedural tweaks by Merrill managers— from stress-free guidelines about onboarding prospects with marijuana companies to granting some brokers exemptions when seeking to carry relations instantly onto their group. Merrill has additionally allowed brokers extra leeway in sending greeting playing cards to prospects and prospects.
Brokers internally and a few who’ve left say the marketing campaign nonetheless has not addressed the supply of their chief grievances, together with that Merrill in 2019 started withholding from brokers’ pay the primary 3% of month-to-month income they generate, a change executives mentioned was meant to rein in compensation prices that outpaced income will increase.
The agency additionally in 2018 launched a carrot-and-stick growth-grid system beneath which brokers should add at the very least three web new households to keep away from a 100-basis level discount of their payout. They lose a share level if they don’t develop buyer belongings by 2.5% or can earn a degree by including greater than six web new households or rising belongings by 5% or extra.
Merrill raised brokers’ development targets in 2019 and 2020, however modified the 2020 plan in June final yr to acknowledge the results of the outbreak of Covid-19 on dealer prospecting and saved the three-household requirement in place for 2021.
Merrill lately has seen a gentle outflow of veteran brokers with common departures of heavy-hitting groups. In two current examples, a group of 5 lifers with a $1.75 billion ebook left on Monday in Colorado to start out their very own advisory agency after one other group of lifers with a $1 billion ebook left on Friday for RBC Wealth Administration-U.S. in Oregon.
“Enterprise Insider” earlier reported Sieg’s commentary on compensation on the city corridor.