Merrill and Bank of America Private Bank saw their number of new client relationships plunge by about 40% last year — from 40,000 in 2023 to roughly 24,000 in 2024.
But executives at the Bank of America subsidiaries were quick to say the decline was not indicative of a larger trend. Merrill Wealth Management president and co-head Eric Schimpf said the 2023 new client number was
Schimpf said on a call Thursday with reporters that he thinks the "spike" occurred after clients at regional banks sought a safe harbor for their assets. Silicon Valley Bank,
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Schimpf said he and his fellow wealth co-head Lindsay Hans believe that the number of new relationships logged in 2024 will be more typical for years to come.
"So when Lindsay and I look at the business, we sort of sit back and think through comparisons to 2023, but also more to 2021, '20, etc.…," he said. "Sort of where we are is: This is really a sustainable level that then grows."
Record for revenue
Schimpf's remarks came the same day Merrill and the private bank saw a 9% year-over-year increase in revenue to a record high of $22.9 billion.
"That increase was driven by higher asset management fees, which reached a record of $13.7 billion, which is up 16% year over year," Hans said.
With expenses subtracted, Merrill and the private bank's net income for the year rose 8% to $4.3 billion.
Those coveted UHNW clients
Rather than concentrate on the year-over-year decline in new households, Schimpf noted that 72% of the firm's new clients had $500,000 or more in total assets. Only 60% of its new clients could say the same in 2023.
Last year also saw the number of coveted ultrawealthy households — with $10 million or more in total assets — increase by 16% year over year.
Hans said the new team can help put advisors in touch with in-house experts on everything from tailored-made portfolios to trust and estate planning to tax management and philanthropic giving. She said advisors are under no obligation to consult the ultrahigh net worth group and receive no incentives if they do.
"And if an advisor chooses to engage the desk, there is no charge," Hans said. "And I would say that from when we launched it with Eric a couple weeks ago, the demand is actually even higher than we had expected."
Schimpf said new financial planners brought into the industry through the firm's advisor training program helped bring in roughly a third of the new household relationships in 2024. That was nearly double the rate seen the year before.
Roughly 2,400 trainees are now enrolled in the program, Schimpf said.
"Many of these young advisors will eventually join teams for existing, experienced financial advisors," he said.
Shift to fee-generating accounts
All told, Merrill and the private bank reported a 51% increase in net new assets in 2024, which rose to $79.2 billion. That helped push Merrill's client balance up by 12% year over year to $3.6 trillion, including investments, deposits and loans. The balance for the private bank meanwhile rose by 11% year over year to $674 billion.
Of the new assets, $68.2 billion went into fee-generating advisory accounts. Fee-based accounts are often prized for their ability to produce steady streams of income. Brokerage accounts, by contrast, tend to generate commissions and other revenue when transactions take place.
"That's $68 billion of brand new money added to our Merrill One fee-based platform in 2024," Schmipf said. "That's money that will continue to earn a fee now on a monthly basis going forward."
Hans said many of the firm's clients have been moving assets out of brokerage accounts. She said 40% of Merrill and the private bank's client balances are now in fee-based accounts.
"We see that continuing to grow as advisors choose this platform to manage the majority or entirety of the client relationship," Hans said.
Of Merrill and the private bank's total assets, $1.9 trillion was held in advisory or discretionary accounts (up 16% year over year), another $1.9 trillion in brokerage accounts (up 12%), $292 billion as deposits (down 2%) and $234 billion as loans in leases (up 5%). Merril and the private bank reported their asset management fees rose by 16% year over year to $13.7 billion.
Hans said many of those gains were no doubt driven in part by last year's bull run in the market. But another source not necessarily captured in the new household tally is assets moved over from other institutions.
"In growing our client balance, part of that is also the success we are having in our clients consolidating their assets that are held at other firms into Merrill and into their advisor as primary advisor here," Hans said.
Banking on the bank
Like many wealth managers tied to a bank, Merrill looks to its affiliate as a source of new investors and AUM. Merrill reported that its clients opened more than 115,000 bank accounts last year, and 62% are Bank of America customers. The firm also reported that 77% of its clients' new bank and brokerage accounts were opened through digital systems, up from 72% the year before.
"As we look to how we will continue to grow in 2025, many of our clients start as retail or institutional relationships at our enterprise and then are introduced to us and our financial advisors for us to take care and manage their wealth management needs," Schmipf said. "We see a tremendous amount of opportunity through commercial banking, retirement benefits and other channels here at the enterprise that will just continue to further our growth."
