of sudden departure Last week, Andy Sieg, president of Citigroup’s Merrill Wealth Management, gave Merrill advisers a chance to hope for the changes they had long sought under the former leader, according to an industry recruiter. said the consultant. financial planning.
But those hopes are likely to be short-lived, and the inexperienced leader who replaces Zeke faces an uphill battle to improve corporate morale. Top talents who bleed frequently to competitors.
Industry recruiter Phil Waxelbaum, founder and president of Masada Consulting, said in an interview that Merrill’s advisers under the new leadership were “going to wait and see for 60, 90 days.” Told. .
“If these advisors start sniffing out that it’s business as usual, new people wearing $3,000 suits and freshly whitened smiles, they’re going to run away.”
On March 30, Zeke announced he was leaving Merrill, where he began his career as a financial advisor in 2016. 2001 before coming out on top at 2017He will become head of Citi Global Wealth in September, reporting to CEO Jane Fraser after a much-needed six-month leave of absence.
Lindsay Hans and Eric Simp each served as regional executives for six years. Appointed as president and co-representative That day, I reported to Merrill’s Brian Moynihan, CEO and chairman of parent company Bank of America.
Jason Diamond, an industry recruiter at Diamond Consultants, said in an interview about what Merrill looks like under Hans and Simpf. Or is it really just carrying out orders from Brian Moynihan and the Bank?”
Not “your MacArthur or your Patton”
One thing is clear, though. On the day Hans and Simpf were promoted, no successors had been announced for the positions they were leaving.The next day, without even rolling out the news in a press release, the company internally announced its longtime head of private wealth. Don Prause recalled We help you transition from the brink of retirement.
Prause, who has held many executive positions at Merrill for 32 years, announced in February that he would be retiring on March 31. announced by Hans As his successor, but a change in the company last week ditched that plan, and Plaus has agreed to stay on as a stable extra hand since a new date for his departure has not been set.
Mr. Diamond said of Mr. Prause’s move, “Mr. Sieg’s departure shows that the company has been caught off guard and is desperate to fill a key position.”
For Waxelbaum, promoting a popular and experienced veteran like Prause to Merrill’s interim governor would make more sense for banks. “They might rise to the occasion,” he said of Hans and Simpf, but the learning curve will be steep.
Waxelbaum said Praus had extensive experience in many aspects of banking, but neither Hans nor Simpf had experience in key leadership areas such as compliance and regulation.
“Neither of them has any trading or investment banking experience,” he added.
“When an army fails and you’re in a high casualty rate situation, you don’t take your least experienced leader and send them there to fix it. Find MacArthur or Patton and go there. I will send it to
Prause, on the other hand, might be able to wield a little power behind the throne — less as regent for Meryl’s new co-in charge and more as a much-needed guide to getting things done.
“There may be genius in this, but we just miss this one,” Waxelbaum said.
Waxelbaum was also skeptical that Hans and Schimpf would be able to implement the changes their advisors had long wanted, but they weren’t sure what to expect, such as getting rid of the unpopular Compensation Grid Policy announced under Sieg’s leadership. We acknowledged that we had room to do so.
“An adviser’s first instinct is that when the head leaves, the king is dead. The king will live long. There will be expectations like Pollyanna,” he said, helping Hans and Simpf act. He spoke of an advisor who aspires to
But Waxelbaum said the new leaders would struggle to make major changes to adviser compensation to avoid confrontations with Bank of America analysts in the process. This means Merrill could see even more layoffs later this year than it has in the past.
“I think the fourth quarter will be the highest turnover rate from Merrill Lynch this year,” he said of his advisors.
The company’s leaders may also find it hard to keep up with history.When Bank of America Acquired Merrill Lynch During the financial crisis of 2008, legacy firms moved from being ‘800-pound gorillas in the room’ in their glory days as broker-dealers to being left behind by their banking parent over time. Certified Financial, according to his planner, Mac Gardner,
Gardner, founder and chief education officer of financial literacy group FinLit Tech, has worked for several wealth management firms. He was Vice President of Wealth Management for High Net Worth Clients at Bank of America in 2007 before acquiring Merrill Lynch.
“Before that, Merrill Lynch advisors had relationships when they were Merrill Lynch,” Gardner said.
Now, Gardner said, “private bankers are typically quarterbacks” at the company, drawing more resources from the rest of the bank to serve high-end customers. But Merrill Lynch’s advisor was once its quarterback.
Sieg’s resignation will exacerbate Merrill’s problems appealing to job market advisers, Waxelbaum said. said about the company.
Rebuild Sieg and Citi from scratch
Meanwhile, in his new job as incoming head of Citi Global Wealth, it will be interesting to see how Zeke navigates the opportunity to build a much smaller wealth management business. The industry has seen it.
“It’s impossible to say whether the direction at Merrill was at Andy’s discretion,” Waxelbaum said, adding, “A lot of what was done with the rewards was with more of Brian’s character.” I’m just there,’ he said. [Moynihan] than Andy. ”
The hiring of Zeke is also a signal to the world of Fraser’s wealth to note that Citi is poised to put itself back on the map by expanding its US wealth management business.
Mr. Fraser said he was “looking for significant growth” in the U.S. asset market.
The company did not immediately respond to a question about how many advisors Citi has, but Citywire said report A year ago the number was around 3,000. In contrast, Bank of America Approximately 19,300 advisors reported By the end of 2022, across divisions, including Merrill, Private Bank and Consumer Investment businesses.
“If you ask most people in the industry, they would say that Citi is not the best player in the wealth management industry in the United States as it stands,” Diamond said. “It’s very exciting. He can basically build this unit from scratch and create it. He can basically make whatever he wants.”
Andy Tasnady, industry compensation consultant and owner of Tasnady & Associates, agreed that Sieg could have more freedom while moving to a smaller brand within the industry.
In an interview, Tasnadi said, “One of the positives for Andy is that he will probably have a little more freedom.
Tasnady predicted that Sieg may “reduce the level of approval and coordination required if he wants the business to go in a certain direction.”