NEW YORK (Reuters) - Bank of America’s Merrill Lynch brokerage unit is launching a renewed push to recruit and train young advisers to supplement a sales force that is aging industry-wide, Merrill Lynch head Andy Sieg said on Friday.
“Make no mistake, when we look out over the next 10 years the thundering herd will be growing,” Sieg said, speaking at the Securities Industry and Financial Markets Association’s (SIFMA)Private Client Conference in Arizona.
Roughly half of financial advisers are over 55, and 100,000 brokers will likely retire over the next decade, according to research firm Cerulli Associates. The brokerage industry, built around lofty sales goals and an eat-what-you-kill mentality, has struggled to attract and keep successful younger advisers.
Merrill Lynch, which typically refers to its financial advisers as the “thundering herd,” runs one of the biggest training programs on Wall Street, with 3,500 trainees currently in its three-year practice management program. It hires around 1,500 trainees to the program annually.
Industry-wide, around half of adviser trainees drop out before finishing the programs, according to media reports. Merrill Lynch does not make public the attrition numbers, but reported in January that it was at a record low.
On Thursday at the SIFMA conference, Cheri Lytle, Merrill Lynch’s head of adviser and strategy development, acknowledged the difficulty of attracting millennials to brokerage jobs that require long hours and offer little flexibility.
“They have a lot of leverage,” Lytle said. “They’re not going to sign up to these lofty sales goals if they don’t want.”
Merrill Lynch will look for new recruits from “all walks of life,” Sieg said, including teachers, entrepreneurs and former athletes.
Sieg said he thinks Merrill Lynch’s business divisions, from Merrill Edge, which has brokers inside Bank of America branches, up to the firm’s high-end Private Banking and Investment Group, will improve training success because there are more options.
Reporting by Elizabeth Dilts; Editing by Leslie Adler