Merrill Lynch Increases Referral Fees to Recruit Veteran Advisors

Posted on June 20th, 2024 at 4:29 PM
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.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next

I cannot thank you enough for your efforts. You have proven to be a valuable resource

Jim T.

LATEST NEWS AND ARTICLES

May 2, 2025
Former Edward Jones Broker Indicted for Defrauding Elderly Widow

Federal prosecutors have indicted a former Edward Jones financial advisor on charges of wire fraud, mail fraud, money laundering, and tax violations after he allegedly stole more than $920,000 from a 77-year-old widowed client.

May 1, 2025
FINRA Fines Sanctuary Wealth $150,000 for AML Program Deficiencies

FINRA has fined and censured independent broker-dealer Sanctuary Wealth Management $150,000 for failing to establish an adequate anti-money laundering (AML) program to detect and report suspicious transactions.

April 30, 2025
Cambridge Investment Research Advisors to Pay $15 Million Fine Over Undisclosed Conflicts in Investment Recommendations

Cambridge Investment Research Advisors (CIRA) has agreed to pay $15 million to settle allegations brought by the Securities and Exchange Commission (SEC), which accused the firm of failing to disclose multiple conflicts of interest in its investment recommendations.