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In the News

Why Merrill, Bucking Trend, Won’t Offer Independent Model for Advisors

Posted by Mindy Diamond

Financial Planning

January 19, 2023
Mindy Diamond Quoted
by Victoria Zhuang

Merrill Lynch will not offer a way for financial advisors to independently affiliate with the Wall Street giant, even as industry competitors open up that burgeoning business model, Merrill‘s wealth management head said Thursday.

Andy Sieg, the president of Merrill Lynch Wealth Management and a member of parent Bank of America‘s executive management team, spoke about his plans for the next 10 years and the unit’s talent and technology agenda in a wide-ranging podcast with Diamond Consultants, a wealth management recruiting firm.

Mindy Diamond, Diamond Consultants’ CEO and founder, hosted the exchange on a podcast that explores how financial advisors are moving into different ways of doing business.

“Independence” refers to advisors who are contractor and own their own books of client business, as opposed to following the conventional model of W-2 employees at a brokerage firm.

Merrill competitor Wells Fargo is one example of a wirehouse that has entered the affiliate space, through its FiNet channel for advisors who want an option beyond working in a firm’s traditional formal employee channel. Like other independent outlets at brokerages Raymond James and Ameriprise, FiNet has recruited advisors from employee firms like Merrill.

An increasing number of advisors want something different from what Merrill and other wirehouses offer, but “the Merrill model is good enough for the vast majority of advisors,” Diamond said, speaking with Financial Planning afterward.

Still, she acknowledged that wirehouses have to face losing top advisors to competitors with different models.

With Merrill‘s 15,000 advisors, “it’s impossible to be all things to all people … That’s why there have been a lot of top advisors that voted with their feet” by going to competitors “and many that will continue to.”

Still, it’s neither the pay nor the tech capacities that advisors cite as their top reason for jumping ship.

“The most important factor is the ability to serve clients with more freedom and control,” Diamond said.

An independent channel could have been one such way to address that — but Merrill is choosing a different strategy.

Sieg said he thought that Merrill was obliged under regulatory requirements to supervise brokers in ways that rankled some advisors. “An advisor may leave based on, hey, they’re willing to take some of the risk to their own license and their own practice,” he said. Still, he added that the benefit of institutional resources and networking with Merrill‘s famous ‘thundering herd’ outweighed those issues for most advisors.

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About Mindy Diamond

CEO – By counseling advisors on how to ask the right questions and “dig deep”, she helps them look at all of the opportunities available to find the one that allows them to reach their full potential. That is, to best serve their clients and live a life that is in sync with their own beliefs and values. Learn more...

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