Merrill Lynch is about to launch a new training program for 6,500 client associates - and it shows how the role of full-fledged financial adviser is quickly changing
- Bank of America's wealth management arm is expanding the scope of its training programs, opening up development resources to its 6,500 client associates.
- The changes around client associates' training, which will fully roll out in February, underscore the wealth management industry's sweeping efforts to attract and retain talent.
- "There have been development programs in place," Andy Sieg, the head of Merrill Lynch, told Business Insider in an interview. "But one of the areas of feedback we've heard from our client associates in the last couple of years is that as the business has grown more complicated in the last two decades, our development programs haven't kept pace."
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Bank of America's $2.6 trillion wealth management arm is expanding the scope of its training programs by opening up development resources to its roster of 6,500 client associates.
Client associates are salaried employees who support financial advisers, typically more than one at a time. For instance, they assist advisers with client inquiries on a transaction's status, clarifying something from a statement that a client didn't understand, or helping a client follow through on a mortgage application.
They're "the glue that brings everything together," Andy Sieg, the head of Merrill Lynch, told Business Insider in an interview.
"There have been development programs in place," Sieg said. "But one of the areas of feedback we've heard from our client associates in the last couple of years is that, as the business has grown more complicated in the last two decades, our development programs haven't kept pace."
Client associates (CAs) will now have access to specialized training through Bank of America's onboarding and talent development body, known internally as the Academy, aimed at client-facing employees across business lines.
CAs do not directly manage clients' assets, though some 55% of staffers in that role have passed securities licensing exams like the Series 7 and Series 66.
A CA may also be an employee who did not pass all the hurdles of Merrill's rigorous financial adviser trainee program, but they could still become a full-fledged adviser down the line.
The changes around client associates' training, which will fully roll out in February, underscore the wealth management industry's efforts to attract and retain young talent in a historically tight US labor market.
The war for talent playing out across the big business of managing money is particularly acute as a wave of advisers are expected to retire in the coming years, according to industry research firm Cerulli Associates.
Cerulli also found that wealth managers are broadly ill-equipped to train up new advisers. Merrill Lynch's expanded client associate coaching is one way to better train up relatively junior staffers and free up financial advisers to up productivity - a focus for big wealth managers seeking to boost margins who want FAs to focus on more than just portfolio construction.
"We try to use simulators that help them practice on the technology, which we feel like is a much more productive and efficient way to get people up to speed on the systems that we use," John Jordan, managing director and head of Bank of America's Academy program, told us in an interview.
Through the expanded development, instructors will train up client associates around areas like more granular aspects of financial planning and investment management.
The Academy has more than 230 dedicated managers around the US, and Jordan estimates some 45,000 employees will go through that group's training - across business lines, including the private bank - this year.
Changing roles mirroring a changing industryMerrill Lynch, for its part, has already made efforts to sweeten the pot for trainee hires.
We first reported in October that the wealth manager, among the largest in the US by client assets and number of advisers, raised trainee financial advisers' starting salaries by $10,000 to $65,000.
It had also deployed 75 performance managers around the country to coach trainees, tracking goals and metrics like how many meetings they have with potential clients.
The CA's widening scope also highlights financial advisers' evolving roles across the industry, from sole stock-picker to a more all-encompassing financial planner working on a team, Sieg said.
CAs may resemble more of a senior relationship manager, or a junior financial adviser.
"As part of this new training curriculum, we're also trying to have training programs that match this increased level of specialization that we see for CA's within our most modern and fastest-growing teams," he said.
Bank of America's global wealth and investment management unit reported record client balances of $3 trillion as of December 31. Merrill Lynch, which is housed under that umbrella, reported record client balances of $2.6 trillion.
Wealth managers at the largest US banks, like Merrill Lynch and rivals like Morgan Stanley Wealth Management and Wells Fargo Advisors, have booked broad-based rises in client asset levels as the stock market soared in 2019.
Merrill Lynch meanwhile has stopped specifying in earnings reports the number of full-fledged financial advisers who operate under the Merrill banner. It now counts advisers and financial solutions advisers, who assist clients who use Merrill Edge digital products, together.
Of that group overall, the firm reported 17,458 advisers as of December 31, marking a 1% drop from the quarter prior that it attributed largely to "seasonally lower hiring in our training program."
