(Company corrects fees in paragraph 2 to $1.4 bln, not $1.04
bln; corrects paragraph 4 to say balances "rose to $1.04 trln
from $960.3 bln," not "$1.04 bln, from $960.3 mln"; corrects
paragraph 5 to show some layoffs were from training program)
By Jed Horowitz
NEW YORK Jan 15 Merrill Lynch's once-thundering
herd of retail brokers fell below 14,000 during the fourth
quarter of 2013, but average broker productivity rose to $1.03
million, fueling a 6 percent jump in quarterly revenue.
Officials at the United State's third-biggest brokerage
firm, which Bank of America Corp bought in 2009 during
the financial crisis, said quarterly revenue of $3.7 billion
reflected record asset management fees that grew to $1.4 billion
as well as higher sales of bank loans and deposit accounts to
About one-third of Merrill's brokerage revenue comes from
traditional brokerage commissions, another third from fee-based
accounts that grew on market gains and asset-gathering and the
final third from net interest income related to loans and other
bank products that brokers sell, a spokeswoman said.
Traditional brokerage client balances at Merrill climbed 9.9
percent to $1.04 trillion at yearend 2013 from $960.3 billion
one year earlier. Assets under management at Merrill and Bank of
America's U.S. Trust private bank ended the year at $821.4
billion, up 17.7 percent from $698.0 billion one year earlier.
Merrill, which trails Morgan Stanley and Wells Fargo
& Co. in number of brokers, said its adviser force fell
by more than 1,000, or 8.3 percent, since the end of 2012 to
13,771. Most of the drop was deliberate, as Merrill continued to
lay off underperformers in its training programs. Among brokers
who left voluntarily, two-thirds were in the bottom 40 percent
of producers at the firm, the spokeswoman said.
Among brokers that Merrill recruited last year, two-thirds
rank among its top 40 percent of producers, she said, and
generally bring 75 percent of client assets from their former
firms in the first year.
Average annualized revenue per broker at Merrill grew from
$927,000 in 2012 to $1.03 million in 2013, excluding Merrill
Edge brokers who are part of Bank of America's consumer bank.
Merrill was more effective in 2013 at preventing broker
defections to other big firms, which recruit brokers by paying
high bonuses. The number of brokers that Merrill unsuccessfully
tried to prevent from bolting to rivals fell by 50 percent, the
Merrill Lynch Wealth Management's fourth-quarter revenue of
$3.7 billion was about flat with its third-quarter results and
made up 82 percent of all revenue in its Global Wealth and
Investment Management sector. U.S. Trust generated $762 million
for the division from its 280 advisers in the fourth quarter, up
10.5 percent from a year ago.
The wealth and investment management sector's pretax profit
margin, a key indicator of how efficiently the business is run,
climbed more than five percentage points in the fourth quarter
from a year ago to 26.6 percent. Merrill's contribution
excluding U.S. Trust was about 25 percent, Bank of America chief
executive Brian Moynihan said in a conference call with
The second-largest U.S. bank company as a whole reported a
higher-than-expected fourth-quarter profit of $3.18 billion on
(Reporting By Jed Horowitz; Editing by David Gregorio)