Merrill starts UHNW advisory group, targeting $10M+ clients

Merrill wants its advisors working with more well-heeled clients and has set up a special team of investment consultants to help them do it.

On Wednesday, Merrill introduced what it's calling the Ultra-High-Net-Worth Advisory Group. This team of 25 investment experts will work with advisors serving clients with $10 million or more in net worth to provide tailored portfolios, trust and estate planning, tax management, aid with philanthropic giving and other services. 

That client segment is a particularly sweet spot for the Bank of America-owned wealth manager. Merrill reported in October that it brought in double the number of clients worth $10 million or more in the third quarter as it had in the same period a year before.

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The new ultrahigh net worth team is being led by Rob Romano, the firm's head of capital markets investor solutions. Romano said in an interview Wednesday that the group is being assembled both from existing investment specialists within Merrill and a few new hires from outside the firm.

"We'll be looking for individuals who have both experience with the ultrahigh net worth client segment and a lot of investment expertise around manager selection and portfolio construction," Romano said.

Romano reports to Brian Partridge, the head of investment solutions group specialists, who said the ultrahigh net worth advisory group will also act as a liaison helping wealthy Merrill clients access services through the firm's parent company, Bank of America, as well as Bank of America Private Bank.

"These are individuals who will work directly with our the Merrill Lynch financial advisors to engage their clients and understand the full scope of the client's financial situation and needs through a discovery process," Partridge said. "And the model is, once we understand their full needs, to then work across the enterprise to identify the right solutions and the right expertise within our organization, and bring that forward in partnership with the advisor and put the solutions in front of the client."

Bank of America and Merrill last reported a headcount in January, when all of their wealth management units, including the private bank, had nearly 18,920 advisors on the payroll. Phil Waxelbaum, an industry recruiter and the founder of Masada Consulting, said a certain segment of those advisors have long specialized in working with wealthy clients.

Catering to the ultrarich

Merrill in many ways became the pioneer in offering advisors with expertise in working with the ultra rich when it set up the Private Banking and Investment Group, or PBIG, decades ago. Renamed Merrill Private Wealth Management in 2019, the unit continues to operate.

Waxelbaum said he's skeptical that nonspecialist advisors — even with support from a team of investment specialists — will be able to offer the sort of white-glove services that have been the distinguishing marks of Merrill Private Wealth and PBIG before it.

"The guy who is great at helping Widow Jones with $100,000 left in a savings IRA is not the same guy who needs to be up on the latest private equity offering for the investor who has a $200 million net worth," Waxelbaum said. "It's just not the same."

The new ultrahigh net worth group, he added, is an admission that "the PBIG concept that has dominated for 30-plus years is no longer growing and no longer succeeding as it once did."

A new model for wirehouses, but not the wider industry

Tim Welsh, the CEO of the industry consulting firm Nexus Strategy, noted Merrill isn't the first wealth manager to look to bolster its regular advisors' ability to work ultrawealthy clients by offering support from a team of back-office specialists. Firms like Orion Wealth Advisors and AssetMark — so-called turnkey asset management platforms offering outside investing expertise — have been doing something similar for years.

But Merrill is likely the first among its direct wirehouse rivals to adopt such a system, Welsh said. In many ways, he said, the ultrahigh net worth team is a recognition that even though Merrill advisors might excel at bringing in wealthy clients, they're not necessarily capable of providing them with everything they need.

"I do think it can work," Welsh said. "The advisor can find the clients and hand them off to someone else — the insurance specialist, the trust specialist or the account management specialist — and then remain primarily an asset gatherer or relationship manager."

Partridge said Merrill was driven to set up its new group in part by the increasing wealth of advisory clients in general and the many new products and services made available to them by recent innovations. Many well-heeled customers are also thinking about whom they want to eventually inherit their riches. The research firm Cerulli Associates recently projected that $105 trillion will be passed down from one generation to another in the next 25 years.

"Clearly, engaging all of those services, whether they be directly in Merrill or in the broader organization of Bank of America, has become that much more important," Romano said. "So bridging the gap, that is going to be a significant component of the role — creating some efficiency for advisors and allowing them to have a single point of contact to then be able to engage all of that expertise across the bank."