(Adds details on Sontag’s career, investor comment and background of McCann departure)
NEW YORK, Jan 6 (Reuters) - Bank of America Corp BAC.N named Dan Sontag, a 30-year veteran of recently acquired unit Merrill Lynch, to head the brokerage's wealth management business, filling a spot vacated by the recent departure of Robert McCann.
Sontag previously headed wealth management for the Americas, according to an internal memo whose contents were confirmed by a Merrill Lynch spokeswoman.
Bank of America, which agreed to buy Merrill Lynch on the same weekend that Lehman Brothers Holdings Inc LEHMQ.PK tumbled into bankruptcy, is under pressure to show it can manage the integration of Merrill's 16,850-strong retail brokerage.
Bank of America CEO Ken Lewis has called the brokerage, the world’s largest, the investment bank’s “crown jewel,” but McCann’s departure, days after the deal’s completion, unnerved some investors.
“All these managerial changes are not good for Bank of America right now,” said Cassandra Toroian, chief investment officer of Bell Rock Capital in Paoli, Pennsylvania.
Bank of America has offered hefty retention packages to the top performing brokers at Merrill Lynch, for periods of up to seven years.
Those measures, combined with the management of a long-time veteran of the business, will likely cushion the blow of McCann’s departure, experts said.
Sontag, whose father also worked for Merrill, was previously in charge of the wealth management unit’s main business and had been at Merrill Lynch for even longer than McCann, who had been with the firm for 26 years.
“McCann was a legendary figure. He had a very loyal following, but a lot of the private client brokers have been very successful in their own right,” said David McCormack, a recruiter who formerly worked at Merrill.
Compensation, not necessarily management, is the key to keeping the advisory business from unraveling, said one former Merrill broker.
But even with retention packages, some brokers will still leave.
“It’s important that they have these brokers locked up but that’s not to say that someone isn’t going to come along and buy them out,” said Bell Rock’s Toroian.
But management changes at the top will likely have little impact on most brokers, a former broker said.
“The most important thing is compensation,” he said. “As long as the advisers feel the organization values what they do, then they don’t really care who’s running the place,” he added. (Reporting by Elinor Comlay; Editing by Andre Grenon)
Our Standards: The Thomson Reuters Trust Principles.