Page 42 - Investment Advisor March 2022

BROKER-DEALER BEAT

By Jeff Berman

Merrill’s New Training Program: Less Selling,

More Coaching, Plenty of Skepticism

Can the broker-dealer meet its goal of graduating 1,000 new advisors a

year? Will they stick around? Recruiters have doubts.

nce upon a time, the Merrill Adding that $100,000 “is a nominal
Lynch advisor training program number for success,” Sarch said that
Owas widely considered the “gold to earn that much in a year, a young
standard” of industry training programs. wirehouse advisor “has to be grossing
But industry recruiters interviewed by roughly $300,000, which means he or
Investment Advisor were split on wheth- she has to have $30 million in assets. OK.
er the firm’s new, shorter training pro- So say to [a] 26-year-old, ‘great, bring in
gram will successfully meet that same $30 million in assets.’”
standard and achieve the firm’s recently The “overriding challenge in the
stated goal of having 1,000 trainees grad- industry overall is” how to train suc-
uate each year once it’s reached scale. cessfully but also, “how can you train
The wirehouse’s new 18-month successfully so that your valued clients,
Advisor Development Program stands to who are essentially paying the bills, are
significantly increase the success rate of not going to seek a new advisor once the
the firm’s advisors, to 80% from just 20%, cessful formula to train advisors, and its advisor retires,” he explained.
the company said last June. The firm’s new program is the latest attempt, he said. Meanwhile, while some advisors are
old program ran 36 months. Historically, “The industry needs it and I wish retiring later than they did historically,
Merrill had hired about 2,000 advisors them luck,” he said. “Merrill does have he said, younger advisors may get impa-
into its training program annually. the advantage that the new training pro- tient in the meantime and flee the firm.
gram” is based largely on the “broker- Merrill is “shooting high,” Sarch said
‘THE JURY’S OUT’ in-a-branch model,” in which parent “I give them credit for trying. But I’m
In recent years, firms in the sector have company Bank of America’s branch cli- sure internally, they’re recognizing
been struggling to “figure out the secret ents are referred to advisors and that that only a certain percentage of those
sauce” to best train people to become serves as “almost like a farm system” for [1,000] will be successful. But the ones
advisors, according to Danny Sarch, the firm, he noted. who do maybe are the future of the
president of the recruiting firm Leitner organization.”
Sarch Consultants. The new program is THE CHALLENGES OF ‘SHOOTING HIGH’
“interesting and it’s different,” he told Even if Merrill does have 1,000 advi- NO MORE ‘GOLD STANDARD’
Investment Advisor, but added that “the sors graduate from the training program Agreeing with Sarch’s skepticism, Tim
jury’s out” and it’s “way too early to say after a year, the key question is how Welsh, president of Nexus Strategy, told
it’s going to be successful or not.” many of them will still be with the firm Investment Advisor that it’s “just a chal-
The old model the firm used, in which two years later? Historically, even when lenging way to train somebody when
trainees made cold calls maybe “200 the training programs on the Street were you put a sales goal on top of a pro-
times in a day to hope to connect to a ubiquitous, a 20% success rate was high, fessional development program.” With
few people” willing to buy a municipal which is typical for any type of sales- the wirehouse’s new program, “there’s
bond over the phone, is a “laughable based job, he noted. probably a little bit more nurturing, a
model in today’s world with caller ID Another challenge: Many people will little bit more mentoring,” he said. “But
and suspicion of everybody,” Sarch said. not trust a young person to manage it’s not that much different than what
That’s why in recent years the com- their money. Therefore, it’s unrealistic they’ve had.”
pany shifted away from that model. Since to expect many will find success quickly, The expectation is still for a new Adobe Stock
then, Merrill has tried to find a more suc- he said. advisor to produce quickly, Welsh

40 INVESTMENT ADVISOR MARCH 2022 | ThinkAdvisor.com