The Herd Gets Holistic

The big news this week in my profession is that Merrill Lynch has not only seen the writing on the wall, it is determined to do some writing of its own – tagging up a new future for itself rather than allowing its present disadvantages to simply run their course unto oblivion.

You see, Mother Merrill knows where the industry is going – and more importantly where it’s fleeing. So finally, some offense…

From RIABiz:

Merrill Lynch has been overhauling its longstanding training program for the last couple of years and when the transformation is complete the newest members of the thundering herd could look more like RIAs than brokers.

The New York-based wirehouse has reignited its 66-year-old training program and the company’s approach is much more like that of an RIA. In the first year of the three-and-a-half-year program, trainees now receive the financial planning module from the CFP course. In the second year, they’ll learn how to build an optimal practice and develop business strategies. In the final year, they’ll receive instruction about executive strategy and even classes on emotional wellness. Previously, the firm’s training program was 18- to 24-months long.

The company receives about 150,000 applications for its training program annually. There are 4,300 people in the program right now and company will have hired 2,500 by the end this year. Trainees who are part of the Practice Management Development Program take on new clients while they are learning the business and are paid a salary during the program. They also receive commissions and bonuses based on productivity. They’re required to bring in $10 million of net new assets annually.

This is good news for the consumers of financial services, who will spend less time being sold products and will get much more in the way of advice and guidance. Their portfolios will become more efficient and their investment pros will stop plugging them with hot, high-cost garbage.

It’s bad news if, like most RIAs, you’ve spent the last five years yanking business away from Merrill like taking candy from a baby. Because as their advisors get more holistic and client-centric, they’ll be muddling your message a bit, blurring the lines of your “competitive advantage.”


Merrill Lynch makes bold moves to train new recruits for an RIA-centric future (RIABiz)

For more on the industry, check out the book:

Backstage Wall Street

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