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

Automating duties saved monetary advisors at Merrill Lynch a month's price of labor final 12 months, liberating up extra time for shoppers and serving to drive the agency's progress, mentioned Andy Sieg, the pinnacle of Merrill Lynch Wealth Administration.

“We thought we had been very aggressive in 2018 in saying that ‘we thought we might ship automation options that might offer you one month’s price of time again in your observe,' and we greater than delivered on that final 12 months," Sieg mentioned throughout a presentation on the Morgan Stanley Financials Convention Wednesday morning.

Gathering mandatory info and getting ready to fulfill a shopper for a evaluation beforehand took a mean of 40 minutes or extra, however that course of was lower all the way down to 10 minutes or much less final 12 months. Even when an advisor met with every shoppers solely as soon as per 12 months, that may quantity to a substantial of time saved. Practices usually have effectively over 100 shoppers.

Extra advisors are additionally selecting to make use of the mannequin portfolios created by the agency's central funding workplace, relatively than assemble allocation fashions on their very own, additionally saving an amazing period of time, Sieg mentioned.

With that newfound time, advisors have gone out and continued to develop Financial institution of America's wealth administration enterprise. Annualized first quarter outcomes put Merrill on monitor so as to add 47,000 new households in 2019, greater than six instances the 7,000 households added in 2017. The "internet new family added per advisor" is now over 4, and the common Merrill Lynch family now has about $1.four million, Sieg mentioned. Internet new shopper progress per advisor is baked into the agency's compensation construction, with advisors punished if they do not deliver in additional than 4 new households, and given a bonus for bringing in six or extra.

About 6,000 new Merrill Lynch shoppers, who've a devoted advisor, got here from Merrill Edge, the self-directed funding platform with $211 billion. They accounted for about 12% of the web new households in 2018. 

However Financial institution of America's industrial banking division has the best synergy with the Merrill Lynch, Sieg mentioned. The worldwide industrial financial institution serves one-in-three U.S. corporations with revenues between $50 million and $100 billion.

“If I take into consideration what's most center-of-the-plate and has the chance to ship actual scale advantages to the Merrill Lynch thundering herd, the industrial financial institution is the very best illustration of this,” Sieg mentioned. “That attain within the market may be very broad and it's a direct overlap of the shopper base of Merrill. More and more, our staff and the industrial financial institution are collectively protecting shoppers and that could be a driver of latest shopper acquisition for us.”

Sieg additionally led convention goers to consider that extra automation is coming. He mentioned the launch of Financial institution of America's digital monetary assistant, Erica, has been well-taken by its client banking prospects and that “it doesn’t take a artistic leap to see how that might apply to our wealth administration shoppers."

The chief additionally mentioned there aren't any singular, drastic developments coming for advisors. As an alternative, there'll proceed to be small and medium-sized initiatives that collectively make a distinction of their practices going ahead.

Regardless of market headwinds, full-year income at Merrill Lynch rose to a file $15.9 billion in 2018, up $607 million or four p.c 12 months over 12 months. The brokerage unit accounted for almost all of the $19.three billion in income generated by the financial institution's International Wealth and Funding Administration, or GWIM.