The news that Andy Sieg — head of Bank of America Merrill Wealth Management since 2017 — left the firm Thursday to become chief of Citigroup's Global Wealth unit is begging the question of what's next for Merrill's financial advisors and the brand itself, says Jeff Nash, CEO of BridgeMark Strategies.
Plus, Merrill could see many of its advisors move to other firms with Sieg's departure, as the overall weakening of the wirehouse channel continues, predicts Nash, who worked as an LPL Financial executive from 1999 to 2012.
This is because Sieg was also "widely viewed by the [19,273] financial advisors across Merrill [and BofA] as a top leader who really had their backs and advocated for the wealth management business with the broader organization," according to Nash, who runs a Charlotte, North Carolina-based consultancy focused on advisor recruiting and transitions.
"With [Sieg] gone, there isn't an obvious advocate and leader for the Merrill wealth management business," he stressed. And there are other significant issues involved, too.
Merrill's culture and organization have "been giving way to Bank of America's priorities over the past decade. From growth goals, to product sales, to payout structure, BofA has cast an ever-widening shadow across Merrill's wealth management business," Nash said.
Such issues "beg the question of whether Sieg's departure is the beginning of the end for the 'thundering herd,' including the gradual sunsetting over the next three to five years of the Merrill Lynch brand itself," Nash explained.
In other words, Sieg's departure from Merrill "opens the question of what becomes of the thundering herd when the organization continues to become more of a bank versus a wealth management firm," he said.
"As such, Sieg's exit also raises the prospect of a far greater exodus of Merrill Lynch financial advisors to other firms, while also reflecting the continued decline of the wirehouse channel of wealth management," Nash predicted.
He added: "The reality is that the wirehouse space years ago had some of the best-known and high-quality wealth management groups that simply don't exist anymore. PaineWebber, Smith Barney, Bear Stearns and Lehman Brothers are all great examples."
Big Impact for RIAs
"The implications are enormous for the independent channel of wealth management, which is where most wirehouse advisors will likely go … with the RIA segment probably winning a majority of wirehouse breakaways versus the independent broker-dealer segment," Nash said.
"As the exodus of financial advisors from wirehouses continues, it's obvious that these professionals have to land somewhere. And there are many well-known and well-liked former wirehouse leaders that have already been busy setting up shop in the RIA space," he pointed out.
"These are senior leaders who see wirehouses continuing to deteriorate, with banks infiltrating the model and top advisors more seriously entertaining options to go to the independent space," Nash said. "They see a tremendous opportunity to recruit breakaways to independent firms."
