Merrill Lynch finally gives advisors-in-training answers as it bans trainees’ cold-calling and shortens development program

  • Merrill Lynch Wealth Management is overhauling its storied financial advisor training program. 
  • The firm said it would ban cold-calling, shorten the program, and aim for high graduation rates. 
  • Merrill paused trainees’ cold-calling last summer after a spate of outreach-related violations. 
  • See more stories on Insider’s business page.

Bank of America’s wealth management business is overhauling its sprawling training program for financial advisors, including instating a cold-calling ban, ending nearly a year of uncertainty for some 3,000 trainees who were told last summer that a pause on cold-contacting potential new clients would be temporary. 

Merrill Lynch Wealth Management will also cut the length of its training program to 18 months from 3 ½ years and aim for higher graduation rates than its program has typically seen, executives said on Monday. 

“We’re targeting an 80% graduation rate, far surpassing our current success rate for new advisors — and frankly rates of success that we see across the industry, which are generally, ballpark, at less than a 30% success rate,” Andy Sieg, president of Merrill, said during a call with reporters. 

Merrill’s decades-old training program is crucial as a source of talent for the wealth manager as it has effectively stopped recruiting experienced financial advisors, who can command hefty signing bonuses, from rival firms like Morgan Stanley and UBS in recent years.

Merrill’s ban went into effect last summer as the business grappled with a spate of violations related to prospecting and cold-calling people on do-not-call lists, Insider first reported. The firm said at the time that it would focus on training in a remote-work environment, like how to properly use tech for reaching out to prospective clients.

As part of the new program’s changes, Merrill will place a new emphasis on reaching new potential clients, or “prospects,” through LinkedIn messaging instead of the practice of calling people out of the blue to sell them on financial services.  

Plans for the new strategy were led by teams under Eric Schimpf, who heads up Merrill’s advisory division, and Matt Gellene, who co-leads advisor development with Schimpf.

Bank of America trader NYSE

Ramin Talaie/Corbis via Getty Images

Lydia DiClemente, a managing director at the bank whose LinkedIn shows she joined in 2011, will lead this new program and report to Gellene and Schimpf. The new Merrill advisor trainees will work out of Merrill offices and report up to Merrill market executives, a network that DiClemente will lead. 

Sieg said there are currently some 2,000 Merrill advisor trainees who are “far along” in its existing program who will continue toward graduating over the next 12 to 18 months, and that it expects some 1,000 new financial advisors per year will graduate in the next few years.   

The training program’s changes 

The program has dealt with some internal turbulence in the last year as trainees grappled with uncertainty and heavy monitoring from supervisors over their activity.

Merrill hired Ernst & Young to examine trainees’ phone-call records, according to a person familiar with the matter, Insider first reported in April. People with direct knowledge of the program said supervisors were monitoring and questioning trainees’ every phone call to ensure they are compliant with the terms of the pause. 

Soliciting business by contacting people who have requested that they be placed on federal do-not-call lists, maintained by the Federal Trade Commission, can result in fines or enforcement action.

Finra, the self-regulatory organization that oversees broker-dealers and other securities firms, is also probing possible cold-calling violations, the website AdvisorHub reported last week.

Merrill last quarter reported record client balances of $2.9 trillion as of March, up 32% from a year prior, and record first-quarter revenue of $4.2 billion. Merrill is housed in Bank of America’s wider wealth and investment management arm, which also includes the firm’s private bank for its wealthiest clients.

The firm has focused on how the wealth business and other parts of the bank can use each other for growth. It’s a playbook the bank has been leaning into for some time, looking to generate new accounts and help up-and-coming advisors find new connections by pushing for referrals between the consumer bank and wealth management. 

Merrill said in April that 55% of its clients also use the bank’s deposit or lending functions, opening 30,000 new checking and savings accounts during the first quarter. 

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