Merill Lynch New advisors
Anyone out there know why the failure rate for new advisors at Merrill is so high? Looking into transitioning but I don’t hear too many great things about life as a newer advisor.
The attrition rate is something they've tried to address. A year ago they cut the performance benchmarks by about half. Concurrently they've also cut their performance checkpoint cycle to every three months meaning that if one doesn't hit 100% of their goal numbers for 9 months (at the longest) they're gone. This is a role more based in sales than in finance. The firm has dedicated a large amount of resources to teach those skills but if one is either ill-suited for sales, unable to execute ML's cookie cutter (literally broken down by day) activities, or simply lazy and/or uninterested in sales the position will not be an ideal fit
Has bofa actually spent any of that money teaching you how to beat the market? Betting it’s all sales techniques and marketing spend. Think about it from a customer’s point of view. If I bring you $1mm in assets, why should I give you $10,000 a year to manage it unless you can beat the martlet by more than what your charging? Thats ludicrous Maybe charge based on performance??? You beat the market you get a percentage of that. If not you get nothing, but I still get screwed with bad advice. People are well informed now and realize the true cost of advice from advisors. Personally I won’t even consider talking to a money manager unless they’re a CFP and charge based on services renders rather than a percentage of my assets. And if someone does want to go this route vanguard’s advisors only charge 30 BP.
This isn't 1983, clients don't hire advisors for simplistic market returns and stock pitching. Buffet's bet blew up the perception of active vs passive. The last few years of market trends have only reinforced the idea. Behavioral management is the largest part of the role. It's geared to HNW individuals not everyday investors (who are encouraged to use Edge). The fee charge is negotiable with each advisor setting their own fee based on the relationship w client and obviously legal and fiscal parameters; it's not static at 1%. Everyone has their own opinion but it sounds like you don't work as an advisor nor with an advisor and therefore have very little knowledge as to what private wealth management today actually entails. Vanguard published a piece a while back that I recommend you take a look at. I believe it's called "Putting a Value on your Value". You're right that a money manager is not right for everyone. Maybe not even most people. However the model that a financial advisor is only as good as his portfolio returns while not wrong, isn't the current industry model.
Blami, you can develop your own portfolio when you achieve certain qualifications. As a newbie, besides of sales/marketing, you are doing planning & analytics too, especially if you join a team. Not analyzing capital markets but client portfolio/tax efficiency/downside protection/trust planning etc. I suggest joining a team to get more resources. Attrition rate on solo advisor is always high. The right team partner will save you years of trials& errors on your own
Well said, Green. Blami - piggybacking off of Green's comment you may want to consider the TFA role on a team as opposed to the FADP role. It is in-line with what Green described. FADPs are no longer required to start pursuing their CFP but it is still a requirement (paid for by ML) for TFAs
CFP is only required for TFAs in the planning role. I think there are 5 silos that TFAs can go into but only planning requires CFP. I'm interested to see how the new fiduciary standard coming into place June 30th, 2020 will affect CFPs at B/D's like Merrill.
Likely because they’re charging 1% AUM to underperform their respect indexes.