Merrill Lynch Increases Referral Fees to Recruit Veteran Advisors
From the desk of Jim Eccleston at Eccleston Law
Merrill Lynch has begun enhancing its recruitment efforts- now offering headhunters a 10 percent referral fee, up from 8 percent, for successful placements. This increase targets 34 specific markets, including key locations like Los Angeles and certain rural areas outside the Bank of America footprint in an attempt to attract veteran advisors.
AdvisorHub reports that this move is part of Merrill's broader strategy to boost its veteran broker recruiting, which had stalled following a five-year hiring freeze. Despite resuming hiring in 2022, Merrill had limited success, and subsequently intensified its efforts late last year, offering attractive packages to seasoned brokers.
The renewed strategy has already seen positive results, such as the recruitment of a $3.5 billion ex-First Republic team in Florida and a $300 million ex-First Republic broker in San Francisco. Typically, firms pay recruiters between 6 percent and 8 percent of an advisor’s annual revenue, though some, like LPL Financial and Wells Fargo Advisors, have selectively offered even higher fees.
Industry recruiter Rick Rummage acknowledged the increase as a significant and overdue adjustment, suggesting it would incentivize recruiters to introduce candidates to Merrill managers, effectively increasing Merrill's recruitment opportunities.
Merrill's recruitment drive comes amidst a continued exodus of high-profile teams, despite the company's claim that experienced broker attrition remains around the historical average of 4 percent. Recent departures include multiple billion-dollar teams moving to competitors like Stifel Financial, LPL Financial, and J.P. Morgan Advisors.
Merrill no longer reports broker headcount in Bank of America’s earnings and stopped reporting combined advisor headcount earlier this year. An anonymous outside recruiter told AdvisorHub that Merrill's fee increase was a necessary adjustment to remain competitive in the recruitment market.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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