The $20 billion total the firm reached through new and existing company customers as of the end of June surpasses the $19 billion total new assets for that business in 2011 and $17 billion in 2010.
The growth the business has seen so far comes as it has boosted its number of plans to about 3,700, up 200 from the same time last year, including 401(k), defined benefit, equity and non-qualified deferred compensation.
Much of that growth is due to the relationships the firm is leveraging between its Merrill Lynch brokerage and the bank, particularly the Global Commercial Bank and the Global Corporate and Investment Bank. Those relationships accounted for $14 billion of the total $20 billion in new assets the firm has gained this year.
That is up from $7 billion that those relationships contributed to the $19 billion total in new assets from last year, and $3.6 billion toward the $17 billion total for 2011.
Leveraging the bank and brokerage resources together has gone from theory and early execution to "now being very mature and a great growth engine for our retirement business," said Kevin Crain, head of institutional retirement and benefit services at the firm.
"It's a very strong channel, and every day we get more referrals and we get more deals coming in from the bankers," while the firm is equipped to handle plans of all types and sizes, Crain said. "That's a great source of captive growth opportunity."
Dennis Brown, a Merrill Lynch wealth advisor based in Fairfield, Conn., who has been with the firm for 17 years says that the efforts to leverage the brokerage and bank resources has boosted his team's business targeting the 401(k) market.
Brown was inspired to increase his team's focus on the 401(k) area after he heard executive David Darnell, who now serves as co-chief operating officer at Bank of America, talk about that business's potential at an event in New York in 2008. Darnelll said at that time that the Westchester/Connecticut region had about 12,000 businesses, while the firm was serving less than 50 401(k) plans in that area.
Brown's team focus now includes the 401(k) market ranging from $2 million to $50 million in asset size, with a strong focus on manufacturing companies. Now in his team's Monday meetings, the companies that they need to follow up on consist of 80% from bank-leveraged help, according to Brown, versus 20% in 2008 or 2009.
"For us, it's worked really well. For our clients, it's worked really well," Brown said. "We now are looking for opportunities on a regular basis to bring in the bank. We've seen what they can do now. I think the bankers have become much more comfortable with advisors and the success that we've had."
With many channels in the business poised to grow and the financial benefit plan business bringing in new business now that will count towards next year's numbers, Crain said he sees no sign that the growth will stop. "The flow continues to be quite strong," Crain said.
Here is a break down of the results so far this year:
- The 401(k) business added $1 billion in new recordkeeping assets, and is expected to exceed the total assets raised in 2011.
- Defined benefit plans increased by more than $2 billion in new assets in the first six months, almost $1 billion greater than last year's total.
- Equity plans have raised $12 billion in new assets, up more than $4 billion from the total raise for 2011.
- Health savings accounts increased by 53,000 accounts so far this year, versus 22,000 total new accounts in 2011.