Nearly 46% of the revenue received by Merrill Lynch's Global Wealth Management unit last year came from just 21% of its top-producing brokers, about 2,500 people, according to copies of the reports reviewed by Reuters.
The monthly reports, available internally as a performance scorecard, provide a rare look inside Merrill, revealing just how far ahead the top one-fifth of advisers are from the rest of the pack.
The reports do not detail each adviser's revenue contribution, but they help provide the best estimate of Merrill's top performers. The reports divide brokers into smaller groups and provide average revenue and compensation credit figures, which Reuters used to calculate take-home pay and estimated revenue for each group of brokers.
Last year, the top 2,400 brokers generated an average of $2.5 million each in revenue for Merrill, double the average of advisers in the next 20 percent, who brought in $1.2 million each on average, according to a report that covered the full year.
The revenue figures, which include money the firm receives from products that brokers sell and any additional money earned from managing client assets, underscore why Wall Street brokerages are in an arms race for talent: Elite performers account for an outsized portion of revenue.
"Clearly the top 20 percent of brokers are far and away the best of the best," said Michael Kostoff, managing partner with the wealth management consultancy The Kostoff Group based in Washington. "These are the guys everyone wants."
Some firms, like UBS, have paid bonuses of up to double those paid by rivals for elite brokers. UBS has hired at least 28 top brokers away from Merrill so far this year, according to Reuters data. And most brokerages are offering far more in sign-on bonuses than they have in years past.
Merrill declined to comment for this story.
Revenue at Merrill Lynch Global Wealth Management, the brokerage business, totaled $13.5 billion last year, ahead of its closest rival, Morgan Stanley, which reported revenue of $11.9 billion for its global wealth management group.
The internal Merrill reports also show that not all brokers in the firm's famous "Thundering Herd" are bringing money into the firm. The number of revenue-producing brokers at the end of 2011 was 12,107, compared with the firm's public total broker headcount - excluding the consumer banking division - of 16,165.
Trainees likely make up most of the difference, industry experts said. Internal figures obtained by Reuters show a similar gap at Morgan Stanley Smith Barney - the firm had 13,745 revenue-producing brokers as of March. It reported having 17,193 advisers in its first quarter earnings.
The Merrill reports also show:
* About 4,500 advisers brought in an average of $1 million or more in revenue for the firm. Of those, about 1,450 brokers with 10 or more years of experience brought in more than $2 million.
* The average revenue brought in by all revenue-producing brokers was nearly $1.1 million.
* Top brokers likely got paid an average of nearly $1 million last year, about 22 times more than the lowest performers, according to Reuters calculations.
* Just 12 percent of advisers - those in the top one-fifth of all brokers by revenue generation - with 10 or more years of experience accounted for an estimated 32 percent of the wealth business's annual revenue.
Broker production, a figure that counts revenue that earns a broker a commission or fee, is listed on a separate report that advisers often use to keep score of where they are against the pack. Generally in the industry, every $1 million in production translates into about $100 million in client assets under management.
Merrill has about $1.8 trillion in managed assets, brokerage assets, deposits and loans.
Poaching an elite broker is one of the only quick ways to bring more revenue to a firm. It can take a decade for a new adviser to build $100 million in client money.
So firms are paying more and more to attract top producers. The best candidates can get up to $5 million in bonuses by taking an offer from another firm and staying for the full length of their contract of about nine years, said Courtney Raymond, a recruiter for Merrill and founder of Houston-based Courtney Raymond Consultants.
The size of bonuses have become "astronomical," she said. "We didn't think it could get so high."
THE ELITE
Andy Tasnady, founder of Port Washington, New York-based consulting firm Tasnady & Associates LLC that serves wealth management firms, said outperformance is often skewed to a small cluster at the top in sales-oriented businesses such as brokerages, pharmaceutical companies and insurers.
