How Merrill plans to get to 100% team-based practices by 2030

With most Merrill Lynch financial advisors now working together on teams, the wirehouse plans to get to a 100% team approach by the end of the decade without any mandates from the home office.

The firm’s share of advisors on teams has reached roughly 80% from only 45% a decade earlier, Merrill Lynch Wealth Management President Andy Sieg noted in a speech last month. Wealth managers across the industry have embraced teams and ensemble practices in varying degrees, from the most radical structure of fully shared services and compensation to a pair of advisors simply merging their practices or a sole practitioner adding specialized employees. Merrill and other wirehouses with falling advisor headcounts also face recruiting and retention challenges. Many of their most successful young advisors are already on teams.

To get all roughly 18,600 advisors with the so-called Thundering Herd to join teams, the question for each of them is: “What's the vision for your own practice?” Merrill National Business Development Executive Kenneth Correa said in an interview.

Merrill Lynch

“It's not a mandate of, ‘Hey, you need to have four advisors.’ It all depends on what you want to do as an advisor or collection of advisors, and what does that market look like,” Correa said. “You're dealing with financial advisors who are entrepreneurs. That’s where we have to come in and help them shape that, based on the vision that they have, and help to complement it with professional coaching.”

Other wealth managers use a team structure across their networks of advisors. In the offices of RIA aggregator Mariner Wealth Advisors, teams have a “pretty consistent” setup with a senior wealth advisor, another advisor and a client service associate, plus tax, trust or other specialized professionals for customers using additional services, according to Tulsa, Oklahoma-based Senior Wealth Advisor Natalie Haggard. Besides creating an easier path into the profession for novice advisors without the pressure of building a book of business right away, clients “feel better knowing” more staff members besides the primary advisor, she said.

“We've heard so many times from prospects, ‘My advisor left, and I don't know who it is now,’” Haggard said. “That doesn't happen at Mariner because there are so many people available to that client that they're used to seeing and hearing from and (seeing) names on emails. If something were to happen to their advisor, there would be people here that they already know that can pick up seamlessly and carry on. So it's good for the client to not have that in the worst case scenario, the downtime of losing somebody, but in the best case scenario, being able to move quickly and have access to a lot of different people.”

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Indeed, Merrill views teams as important for forging “greater chemistry and greater connections” with clients across generations and as U.S. demographics keep shifting toward a multiethnic future base of clients, Correa said. The firm provides access to practice management consultants as part of the Elite Growth Practice it launched two years ago. Each team may define roles such as CEO, chief operating officer and head of business development, as clients seek out more kinds of services for more hours throughout the day, he said.

“Teams should be the present, and teams are definitely going to be the future,” Correa said. “More and more people will be part of teams, not because we're mandating it. It's more and more because the marketplace is demanding it.”