Cohesive branding and messaging is an important component of any financial services company and their success. A disconnect in these fundamental principles can lead to staff and client confusion that creates a ripple effect of negativity which can spread to all areas of a business. Merrill, which was Merrill Lynch and should not be confused with the digital trading platform offerings of sister-company Merrill Edge, is a firm which is facing the repercussions of such brand confusion as the non-to-subtle shifts away from the Merrill Lynch name by parent company Bank of America have the firm’s own advisors questioning just who they are working for and what the company stands for.
To understand the full gravity of the Merrill branding situation and its impact on its advisors, one must take a look back. Under the moniker Merrill Lynch, the firm built a long and storied history on Wall Street as a leading financial services firm. Their advisor team, whose strength and abilities for excellence among its peers was undeniable, was referred to as ‘the thundering herd’ – in a nod to both the Merrill Lynch advisory team’s success and the brand’s image of a bull at full charge.
What is true in life is also true in financial services and as the saying goes, all good things must come to an end. The first crack in the foundation for Merrill Lynch as a brand made itself known during the 2008 financial crisis – a year which saw the deterioration of many a large financial institution. At the height of the financial crisis, Merrill Lynch in a move of self-preservation agreed to a $50 billion all-stock deal and sold to Bank of America who remains the firm’s parent company to this day.
Fast forward to 2019 and the big bank ethos which ruled the financial services industry of the past is no longer relevant. RIA, Hybrid RIA, Independent Broker Dealers, OSJs, and Super OSJs have all emerged as power players in the financial services industry and created worthy opposition to the more traditional thinking still prevalent in big-bank wirehouse firms. Advisors have begun mass exoduses from major wirehouses as a new focus on managerial transparency, shared business philosophy, personal accountability, and client-focused products and services are no longer aspirations of but requirements for the most talented and successful advisors and teams. In an effort to keep pace with the competition and stymie the flow of advisors out of their doors, wirehouse firms have chosen to get creative with their brands, services, and compensation programs in an attempt to retain and placate their advisors and teams. Which brings us to Bank of America’s decision in February 2019 to launch a re-branding effort for Merrill Lynch.
On surface level, the re-brand of Merrill Lynch initially made sense. The goal was to grow Bank of America’s institutional banking business in tandem with its financial services AUM. Bank of America announced Merrill Lynch would become simply Merrill and launched a new advisor compensation plan which rewarded advisors with a commission structure focused on growing their practices and driving customers to Bank of America banking products and services. Bank of America also doubled down its promotional efforts of Merrill Edge, its electronic trading platform comprised of a team of salaried advisors overseeing a suite of digital investment services for clients. But then, Bank of America made an inexplicable move that has resulted in a wave of advisor confusion, if not anger, and could be seen as the catalyst which is driving large revenue producing teams and advisors out of their doors in droves. Bank of America chose to move salaried Merrill Edge advisors into the Merrill fold.
The initial move of Merrill Edge advisors was insignificant, 300 to start, but the messaging it sent to Merrill advisors was loud and clear. Strategically speaking, moving salaried advisors into the Merrill wealth management division shows a calculated step toward controlling salary costs and ultimately firm expenses. The trickledown effect of such a move is that advisor compensation at the firm will likely decrease – which is understandably distressing to advisors. Couple this with Merrill’s leadership choosing to continue with a recruiting freeze in an effort to display strength of purpose in their current ‘grow your practices’ advisor strategy and a story for Merrill is beginning to unfold, and not one based on pride in its ‘thundering herd’.
Most recently, the Merrill television ad campaigns themselves have proven a decided shift away from the Merrill name and in its place put the emphasis on Bank of America, literally showing the Merrill name for a brief second before it is erased by the name of Bank of America. These commercials are a tell-tale sign that Merrill Lynch will be no-more in the near future. Further, these types of commercials are using subliminal messages to get everyone used to the Bank of America name and forget about Merrill Lynch. Although this may seem minor to most people, to the ‘thundering herd’, this is a dagger in the heart to all those loyal employees and advisors that stuck with the firm through all the tough times.
What Bank of America and Merrill leadership seem reticent to realize is that ‘thundering herd’ is not just an affectionate nickname or branding ploy, but represents to Merrill advisors, both past and present, a dedication to their practices, services, clients, and – yes – earnings. Going from Merrill Lynch to Merrill might have been viewed as a simple name change, but what has ensued through leaderships actions has chipped away at the legacy upon which their advisory teams have proudly stood. It may be too late for Merrill to recapture the magic of its ‘thundering herd’ completely. That is, unless the firm recognizes that its own leadership has fostered an environment which has cannibalized on itself, both in terms of staff and product offerings, thereby fostering its own slow demise through the steady loss of its most successful advisors and teams. Ultimately, Merrill was built on its ‘thundering herd’ and its success and ambitions. Render the values and traditions the ‘thundering herd’ holds dear extinct and you render the ‘thundering herd’ extinct as well.
