$900 Million Team Walks From Merrill As Top Brass Named

Matthew Smith

23 October 2008

News filtered out that a team of Merrill Lynch advisors left the firm with around $900 million in client assets on the same day Merrill executives secured top roles in the new entity following its integration into Bank of America.

The team of four former Merrill advisors left the firm to start their own independent advice practice in Connecticut before learning that Bob McCann, Merrill's wealth management chief, will run the combined financial advisor group.

Kevin Burns, William Lomus, William Loftus, and Jim Pratt-Heaney — known as the LLBH Group at Merrill Lynch – left the firm to start LLBH Group Private Wealth Management, Pershing Wealth Solutions, the independent practice’s new custodian, confirmed to WealthBriefing.

“They would have run the numbers and figured they can do a lot better on their own than if they waited to accept the ‘stay bonuses’ they would have most likely been offered,” said compensation consultant, Andy Tasnady of Tasnady Associates.

The 16,000-odd Merrill advisors were promised “retention packages” soon after BoA acquired the Wall Street brokerage firm in September.

Mr Tasnady said a common “stay bonus” for top end advisors would be in the vicinity of 100 per cent of yearly revenue.

“A $900 million practice would bring in yearly revenue of around $5 million,” he said.

“Stay bonuses aren’t going to keep people from going who want to go,” he added.

Merrill/BoA are understood to be offering its top advisors retention bonuses within the next month.

Meanwhile asset custodians are helping breakaway brokerage advisors set up their own independent advice practices: Pershing spokesman Michael Geller confirmed the firm is currently in active discussions with more than 90 wire house teams representing more than $23 billion in assets under management.

Mr McCann’s appointment as head of the advisor group was viewed as part of Merrill Lynch’s advisor retention strategy.

Greg Fleming, Merrill's chief operating officer, Tom Montag, head of Merrill's sales and trading operations, and Mr McCain joined John Thain, Merrill's chief executive, who was previously appointed to BoA’s top brass.