By Michael Wursthorn 

Merrill Lynch wants its herd thundering again.

Bank of America Corp.'s brokerage arm is thinning some of its executive ranks and shuffling others in an effort to get brokers collecting more assets and producing more revenue, according to a memorandum viewed by The Wall Street Journal.

Merrill head Andy Sieg, who is roughly three months into his tenure, told the firm's more than 14,500 brokers that the goal is to get Merrill to "operate more effectively as a business," according the memo. "Our shared objective is to make the organization feel like a smaller, more tightly integrated firm."

To that end, Merrill will cut the number of divisions its brokers work within across the U.S. from 10 to six. The divisions are being rejiggered to include a broader swath of markets and brokers, giving some division executives new or bigger territories to oversee, while others will retire, leave the firm or transition into new roles.

The changes won't lower the number of financial advisers Merrill fields, a person familiar with the matter said, who added the restructuring isn't aimed at reducing costs or head count.

The division executives, who act as a link between Mr. Sieg and the market executives overseeing brokerage branches, include Bill Lorenz in the Northeast, Eric Schimpf in the Southeast, Paul Lambert, who will focus on the Midwest and Jeff Markham in the Western division. Mr. Sieg also promoted market executives Lindsay DeNardo Hans and Vince Fertitta to oversee the Mid-Atlantic and Texas Mountain South divisions, respectively.

Former division executives Don Plaus and Ben Prince are being reassigned, the memo says. Mr. Plaus will run Merrill's elite ultra-high-networth client group known as that Private Banking and Investing Group, a role recently vacated by Mr. Sieg's brother Phil Sieg. Meanwhile, Ben Prince has been asked to determine a strategy to reinvigorate more than 150 smaller Merrill offices that are understaffed in some cases.

Linda Houston, who was the division executive of Merrill's New England operations, will retire, while Jeffrey Tucker, division executive of the New York City region, will be reassigned to a role yet-to-be announced.

The restructuring comes less than three months into Mr. Sieg's tenure as head of Merrill Lynch. Shake-ups among the executive ranks tend to follow regime changes at brokerages, with Wells Fargo & Co., Morgan Stanley and UBS Group AG following through on similar exercises the past 12 months.

The changes, in some ways, mirror rival UBS's shake-up last summer, when it undertook a broad reorganization to better empower branch managers to make decisions. Like Merrill, UBS cut a layer of management, reduced the number of "complexes," or groups of branches, and increased the overall number of branches.

Like UBS, Merrill wants its lower-level executives to be in a position to make more decisions with their markets and broker branches without having to involve divisional executives or Mr. Sieg's management team, people familiar with the matter said.

But while UBS's reorganization also included a pullback from recruiting experienced brokers, Merrill is considering hiring even more brokers and support staff in certain underperforming markets.

Mr. Prince, a 22-year veteran of Merrill, is tasked with figuring out how to grow about 150 Merrill offices that haven't been replenished since brokers left in recent years. The markets aren't your atypical Merrill branch serving big-city investors with millions of dollars to invest. Instead, they are mostly in "Main Street" communities already served by regional brokerages like Edward Jones and Raymond James Financial Inc., one of the people familiar said.

Mr. Sieg said those branches represent a "significant market opportunity, " according to the memo.

Mr. Sieg and his team now face the formidable challenge of continuing to execute on Merrill's ambitious plan to mostly work with retirement savers in accounts that charge a fee based on a percentage of assets and where brokers are held to a "fiduciary" standard of care. The firm decided it would mostly ditch commissions in retirement accounts to avoid the more onerous aspects of the Labor Department's fiduciary rule, which now faces a delay.

Converting more of Merrill's commission-paying clients into accounts that charge a fee has brought on more work for brokers, current employees say. The added work involves more brokers meeting with more clients and keeping thorough notes on their financial well-being to create financial plans, taking time away from their ability to find fresh assets.

Of Mr. Sieg's other executive changes, he has tasked Mike Adornetto, formerly a managing director who handled the bank's treasury products, with helping brokers focus on asset harvesting and less on paperwork. Mr. Adornetto, as Merrill's chief operating officer, will oversee the firm's more than 6,500 client associates, desktop technology for brokers, as well as the firm's online and mobile strategy, the memo said.

Other executive changes include naming Hong Ogle, a market executive, as head of adviser development, where she will manage Merrill's training program, while Kirstin Hill, a 20-year Merrill executive, has been named strategic performance executive, overseeing broker compensation and developing metrics to gauge market growth, among other matters.

Write to Michael Wursthorn at Michael.Wursthorn@wsj.com

 

(END) Dow Jones Newswires

March 29, 2017 18:03 ET (22:03 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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