Don’t expect other wirehouses to match Merrill Lynch’s recently-sweetened payouts for retiring advisors, because Morgan Stanley, Wells Fargo and UBS had taken steps previously to retain senior talent. In addition, precise comparisons of the various incentives the wirehouses offer are difficult for FAs to make, say recruiters.

“Other wirehouses already have rolled out their own souped-up advisor retirement programs,” notes Mark Elzweig, a recruiter and president of New York-based Mark Elzweig Company.

“Wells Fargo announced its Summit Program earlier this year and UBS has its ALFA program,” he adds. UBS first introduced ALFA in 2015, as FA-IQ previously reported.

Morgan Stanley unveiled sweetened post-retirement bonuses for top-tier advisors in October 2018. Under that plan, those FAs’ total retirement payouts jumped from a previous maximum of 250% of their 12-month trailing production to a new maximum of 350%, as FA-IQ previously reported.

Moreover, the new Merrill Lynch plan only becomes effective two years from now, so it could change again. So, recruiters ask, what’s the rush?

“Ensuring that senior advisors are properly incentivized to transition their assets to more junior advisors at their firms is a critical concern of all wirehouses these days. That’s especially because Cerulli Associates research says that more than 40% of wirehouse advisors are expected to retire in the next ten years,” Elzweig argues.

But no fierce competition stirs among the wirehouses to attract senior advisors based on sweetened retirement and client succession plans.

Rather, the plans are aimed at keeping senior advisors on their rosters and attracting more novice FAs who will inherit the retiring FAs' clients under terms dictated by the home office.

“It’s extremely difficult for newer advisors to build a book and I think that many of them will find these kinds of programs a very attractive option — even if it locks them into their firm for a long time,” Elzweig adds.

“These are not aimed at attracting senior advisors,” Danny Sarch, president of recruiting firm Leitner Sarch Consultants, says about the enhanced payouts for retiring FAs.

Even if veteran FAs did want to compare the payouts of Morgan Stanley, UBS, and Wells Fargo with Merrill Lynch’s newly-sweetened deal, they would struggle.

“It’s hard to do apple-to-apple comparisons,” Sarch says. Some of the plans are easier to qualify for, but not as attractive, and most have fine print that allows the wirehouses to extricate themselves from payouts based on advisor compliance issues. And the difference between the harshness of those rules might be significant," says Sarch.

Merrill Lynch management officials declined to say how many of the wirehouse’s advisors will be eligible for the program in 2021, or in five years from now. The average age for Merrill Lynch’s more than 17,000-strong roster is 50, according to a Merrill Lynch spokesman. But that statistic excludes the roughly 2,000 advisors in training — a group for which the average age is 34, the spokesman noted.

According to previous reporting, Merrill Lynch will increase its award payouts to retiring advisors for all production levels. The award will increase by five percentage points for the lower-production tiers while the top producers ($7.5 million or more) could see their payout jump by a whopping 75 percentage points to a maximum of 275% of their trailing-12 month production.

CTP payouts are calculated when advisors enter the program and equal an advisor’s trailing 12-month production multiplied by their CTP award percentage.

Advisors producing less than $1 million would see a maximum payout of 160% of their production. Advisors producing between $3 million and $4 million could get 225%; those with $4 million to $5 million could get 235%; and those producing in the $5 million to $7.5 million-range could get a maximum payout of 260%.

Advisors qualify for the program if they are at least 55 years of age, have spent five or more years at Merrill Lynch, and a combination of those two factors exceeds 65.


Mindy Diamond, longtime industry recruiter and president and CEO of Diamond Consultants, suggests Merrill Lynch’s new plan may have disappointed some of its FAs.

“The advisors were expecting something more similar to what Morgan [Stanley] did, which was 100% retention package to stay. They were expecting more. It’s still less than what an advisor can get on the street to move. In other words, transition packages are greater than that — even the enhanced program. But moving is a hassle, right? It’s disruptive. And certainly the path of least resistance is to stay put. So, it’s a fair deal, certainly for somebody who wants to monetize their business,” Diamond says.

When putting the package together, Merrill Lynch management likely conferred with the wirehouse’s top producers — an estimated 99 of them who will have $5 million in production this year, Sarch says. Undoubtedly, Merrill Lynch management would have aimed to make that particular crowd happy with the news.