| NEW YORK, April 21
NEW YORK, April 21 Merrill Lynch is dangling a
new incentive in front of its brokers by creating a "recognition
club" for those who bring in $8 million or more a year from
clients, more than doubling the top goals set by its securities
Until now, Merrill Lynch Wealth Management's top recognition
club was its "Circle of Champions" for financial advisers who
produced $4 million of commissions and fees, or received 2.5
million of "production credits" for sales of products and
services that qualified them for the firm's top sales payout.
In a sign that the Bank of America Corp subsidiary
expects new account programs and technologies to unleash new
sales power, Merrill's new club doubles the criteria for entry
as well as the cash awarded to its most elite advisers.
The new "Pinnacle Club" will pay its members $10,000 in cash
and additional benefits if they produce $8 million of revenue or
build up 5 million of production credits.
Club membership also gives members bragging rights as elite
brokers, the ability to advertise their status on their
websites, and priority when accounts of departing brokers are
redistributed or when customers are referred to the
broker-dealer from other parts of Bank of America, according to
a description of the recognition clubs in Merrill's 2014
Brokers who qualify for Pinnacle as well as for Merrill's
seven lower-tier recognition clubs also can participate with
their significant others in "Top Advisor Summits" that are
usually held over several days in resort areas.
In reporting first-quarter earnings last week, Merrill said
its 13,725 brokers were on target to produce an average of $1.06
million each this year, one of the highest averages in the
brokerage industry. The average is skewed, however, by heavy
hitters who could qualify for the new club. Fewer than 5,200 of
its advisers had $1 million or more of production in 2013.
A Merrill spokeswoman declined to comment about the new
Spokespeople at competitors such as Morgan Stanley,
Wells Fargo Advisors and UBS Wealth Management Americas
, whose recognition clubs top out for brokers with $2
million to $3 million of annual revenue, did not immediately
respond to questions about whether they would raise their top
Brokerage firms are sensitive about discussing sales
incentives as the U.S. Securities and Exchange Commission
considers imposing a higher standard of customer care on their
sales practices and the Financial Industry Regulatory Authority
is warning the firms to vet potential hires more carefully.
Broker-dealers can sell any product considered "suitable"
for a particular customer's net worth and risk appetite, even if
they choose one that is more lucrative to the firm or adviser.
Investment advisers who directly manage money are held to a
higher standard that requires them to put their customers'
interests ahead of their own.
The Dodd-Frank financial reform bill directs the SEC to
decide whether to conduct studies on the care standards and
decide whether to unify them.
Merrill's compensation guide notes that advisers who have
received internal admonishments or were subject to action by any
U.S. securities regulator cannot participate in a recognition
club for the year these occurred.
(Reporting by Jed Horowitz; Editing by Lisa Von Ahn)