Sign of the Times: Merrill Follows Ed Jones on Recruiting
In the battle for new advisor talent, Merrill Lynch and Edward Jones appear to be copying each others’ distinctively different recruiting strategies.
Merrill Lynch Wealth Management, head Andy Sieg said at an industry conference last week that the firm will grow its force of 14,600 brokers not just with the addition of veterans and by training a new generation of advisors, but by hiring people from “all walks of life,” a company spokeswoman confirmed. Community leaders, teachers, professional athletes and others who don’t have a financial background are all grist for the Thundering Herd, he said.
That strategy is unusual for Merrill but eerily similar to another stalwart of the securities industry with a distinctively different culture, said Alois Pirker, research director at consulting firm Aite Group’s wealth management practice.
“Edward Jones had the exclusive on this strategy,” Pirker said. “The wirehouses have been about getting a large number of young recruits in the door and then seeing who makes it through the process and then establish them or poach from the next firm over.”
Merrill’s strategy shift may parallel Sieg’s announcement on March 29 that the Bank of America unit wants to up its profile in in smaller geographic markets, the exact field where Edward Jones’ 14,919 advisors ply their wares. Jones specializes in selling mutual funds to middle-America from often rural outposts, and the great majority of its brokers work in single-advisor offices with the help of one assistant.
Sieg shifted veteran sales executive Ben Prince from his post running Merrill’s Southwest division to head the “community markets” initiative.
“We want to better understand the markets these offices serve and ensure they are appropriately staffed and supported,” Sieg wrote in a March 29 memo. “We expect to see the results of the strategy efforts this summer.”
Career changers could be a key part of the effort, Pirker said.
“With that strategy, you get into a community you’re not known in but with an established person,” Pirker said. “It’s a smart move and Edward Jones has done a tremendous job perfecting that method.”
Ironically, Edward Jones has recently made a pivot to adopting more traditional Merrill-like practices. The St. Louis-based firm last week launched its “first ever” advertising campaign to recruit experienced brokers who did not come up through its disciplined sales-training regime, according to a press release. Jones wants to be on brokers’ radar, it said.
“This campaign is part of a broader strategy that includes additional sourcing resources, a streamlined selection process and enhanced onboarding support for experienced financial advisors to ensure we are firmly within the consideration set,” Katherine Mauzy, head of financial advisor talent acquisition, said in the release.
Jones’s shift may indicate that it is becoming harder for trainees to gather assets through traditional cold-calling and neighborhood door-knocking, said Frank LaRosa, a former Morgan Stanley complex manager who runs recruiting firm Elite Consulting Partners in Moorestown, N.J.
“They have recruited before, but it’s been very spotty,” La Rosa said.
If Jones pushes ahead with the plan, it may have to change some of practices, he said. For example, it is not a signatory to the Protocol for Broker Recruiting, which allows brokers some latitude to move among signatory firms without being sued, because it rarely recruited from other firms or saw brokers jump to them. That permits it to sue brokers who join other firms and try to woo their Jones’ customers.
For both Merrill and Jones, the decisions to expand their recruiting strategies reflect a pressing need to replenish sales forces that are being depleted by retirement and a dearth of young replacements.
“The retiring advisor is becoming every year a more pressing issue,” Pirker said. “Firms are really trying to find ways of broadening the base differently and exploring different avenues.”