Merrill Lynch is setting itself apart from its wirehouse competitors by steadily growing its advisor headcount this year, and doing so primarily through training new advisors. John Thiel, head of Merrill Lynch Wealth Management, says that it's a critical component of the firm's ability to grow and serve clients.
Thiel spoke about how the firm is approaching robo advisors, leveraging digital technologies and bringing on new advisors.
MORE FIRMS HAVE DECIDED TO DEVELOP OR ACQUIRE ROBO ADVISOR PLATFORMS. WOULD MERRILL CONSIDER DEPLOYING ITS OWN?
Yes. Because it’s necessary to understand what robo is: It’s machine and machine-learning evolving to a point of automation of the investment advice component. I think over time you’ll see tech become more involved in the process.
It creates capacity for the advisor because they are spending less time on the investment process and spending more time on what is most salient to our clients, which are their goals and needs.
HOW WOULD YOU IMPLEMENT IT?
It will simply be spending time understanding our clients’ goals, needs and priorities. That can be done with an advisor or in a digital environment. It’s about understanding a client’s risk tolerance, a time horizon for their goals and the liquidity needs for those goals. So the algorithms will develop an asset allocation.
Again, what I’m trying to say is that it really can add capacity back, because we can automate some of those functions and then put a human overlay on that process.
SO IT WOULDN’T BE A STAND-ALONE ROBO?
It would be stand-alone if clients want to self-direct. We have that option today in Merrill Edge. So to me, it’s very analogous to direct investing, where someone feels like the algorithm is what they are looking for in a relationship, and they don’t see behavioral advice or financial planning — what we see as very important — as important to them, at least at this moment.
WHAT OTHER DIGITAL CHANGES ARE ON THE HORIZON?
We’re really trying to think about the whole digital environment and how we can enhance it.
Here are the themes: one, greater access. Clients want more access to their own information as well as to advisors, and that can be done with mobile technology.
The second theme would be empowerment. If I want to change my risk tolerance or my address, I’m happy to call you, but maybe I want to do it myself.
The third, which we will continue to focus on, is collaboration. How can we collaborate, talk in a way that enhances productivity for both of us?
Those three themes will drive our technology investment in and around the digital experience.
MERRILL IS GROWING ITS HEADCOUNT WHILE OTHER WIREHOUSES ARE SHRINKING. WHY DOES YOUR STRATEGY DIFFER?
We have a 70-year legacy of developing advisors through our training program.
We feel we can gain more market share with more people, not less. And there has been a clear recognition on our part that we could, would and will do more for our clients, such as lending. So we would need to add skill sets because you would need a team to do it.
DO YOU HAVE A HEADCOUNT TARGET IN MIND?
No. We just want to grow responsibly every year. And the reason we say responsibly is that you can’t just put your foot to the floor and accelerate.
A few years ago, we got to a point where our training program got too big, so there was some attrition. We try to keep it between 3,000 and 3,500.
MERRILL HAD NOTABLE RECRUITING SUCCESSES RECENTLY. HAS THE FIRM CHANGED ITS RECRUITING PITCH TO BECOME MORE ATTRACTIVE TO ADVISORS AT OTHER FIRMS?
No. We haven’t changed our pitch in years. We’ve always positioned ourselves as a platform where clients could be well-served. We have scale that allows us to invest in technology that helps our people, and we have a clear strategy, a goals-based approach. More and more [advisors] are looking for what they can do for their clients. Our banking and lending capabilities has been a real draw.
Register or login for access to this item and much more
All On Wall Street content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access