Broker departures accelerate at Merrill Lynch

NEW YORK, Tue Mar 13, 2012 − At least 50 advisers who managed nearly $12 billion in client assets at Merrill Lynch have left the “thundering herd” since Jan. 1, based on moves tracked by Reuters.

Many were veteran brokers that are hard to replace and who managed large sums of client assets at the firm. Reuters tracks the movement of advisers and teams managing a minimum of about $100 million in client assets. Such advisers or teams typically generate $1 million or more in revenue annually.

Merrill dismissed the defections.

“People have been calling ‘the great exodus’ for more than a decade now and the facts have not borne it out,” the firm said in a statement Monday. Merrill, which was purchased by Bank of America in 2009, declined to comment further about the recent departures.

But data collected by Reuters tells a different story. At least 70 advisers who managed more than $16 billion in client assets have left the firm since September, among advisers or teams managing $100 million or more. That accounts for more than 1 percent of the brokerage’s roughly $1.5 trillion client asset base.

While the company has in the past said that departures are of little concern because Merrill has a robust training program, industry observers say it can take trainees 10 to 20 years to amass $100 million in client assets.

“Even a couple of big teams leaving can rip a big hole because they are just so substantial,” said Alois Pirker, a research director at the Boston-based Aite Group, which studies wealth management trends. “When you’re losing advisers and have to replace them and pay big signing bonuses, it’s an expensive proposition.”