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Merrill Lynch's pipeline for new advisors 'in limbo' as the firm overhauls training program and issues over cold-calling violations persist

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Brian Moynihan Bank of America Chief Executive Brian Moynihan. The bank’s Merrill Lynch Wealth Management business has paused advisor trainees’ client prospecting activity.

  • Merrill Lynch Wealth Management has maintained its pause on advisor trainees’ client prospecting, a halt on outbound communication within an important pipeline for the business.
  • The temporary pause on trainees’ prospecting has remained in part because trainees advisors are still violating do-not-call list restrictions, according to a person familiar with the matter.
  • The hold in trainees’ client prospecting activity can have a meaningful impact on trainees’ morale: if advisors-in-training are not able to build up fresh books of business, their progress can be stunted. 
  • The pause remains in place while the leadership of Merrill’s new advisory division, created last fall around advisors’ training and development, maps out their strategy, a spokesperson said.  
  • Full-time advisors are conducting business and winning new clients as they normally would, but Merrill relies on trainees’ success as the firm has pulled back on hiring experienced advisors in recent years. 
  • Visit Business Insider’s homepage for more stories.

Bank of America’s sprawling wealth management arm has maintained its months-long pause on financial advisor trainees’ client outreach, a temporary hold that can complicate the business growth that new advisors need to thrive.

The temporary pause on trainees’ prospecting, or reaching out to someone who could turn into a potential client, has remained in part because novice advisors in Merrill Lynch Wealth Management’s training program are still violating do-not-call list restrictions the business has in place, according to a person familiar with the matter.

Merrill Lynch declined to comment specifically on violations.

The wealth management division introduced the pause in trainees’ prospecting late last summer, and the firm is monitoring their activity. Business Insider first reported the violations that led to the pause.

Read more: A leaked memo shows Bank of America’s Merrill Lynch is dealing with ‘many’ violations by financial adviser trainees working from home, so it’s paused their reach-outs to new clients

The hold in trainees’ client prospecting activity can have a meaningful impact on trainees’ morale. If advisors-in-training are not able to build their networks and books of business, their progress can be stunted. 

The person familiar with the matter, who requested anonymity to speak freely, said some trainees are frustrated and “in limbo.” The program trains some 3,000 to 3,500 at any one time. 

The Financial Advisor Development Program (FADP) and ones like it across Wall Street generally have low graduation rates, as many drop out of the intensive, multi-year program or shift to other areas of the bank

“We announced in October a new Advisory division within Merrill, now responsible for advisor training and development. Our prospecting pause remains in place while the leadership of this new division refines our strategy and approach to improving the early and long-term success of our advisors,” a Merrill spokesperson said.

“We have no specific update on the timeline, though are confident prospect calling activity will pick up in the not too distant future,” the spokesperson said. 

Full-time advisors are conducting business and winning new clients as they normally would, albeit in a largely remote environment. Still, Merrill, which oversees some $2.6 trillion in client assets as one of the largest US wealth managers, relies on trainees’ success for organic growth as the firm has pulled back on hiring experienced, and oftentimes expensive, advisors in recent years.

The business, led by President Andy Sieg, recently shuffled program leadership and made structural changes. The program’s former head and a longtime leader at Merrill, Jennifer MacPhee, left the company last summer. 

Read more: The head of Merrill Lynch’s training program, the firm’s main talent pipeline, is leaving as the business grapples with remote work. Here are the challenges that await her successor.

Last fall, the business then folded the training program into a newly created advisory division within Merrill led by company veteran Eric Schimpf, who was also named co-head of advisor development for Bank of America with Matt Gellene. The division was created to focus on developing early-career advisors across Merrill. 

“In his new role Eric will lead the FADP Performance Organization, the Advisor Growth Program, and our Community Markets strategy. This ensures that the three entry points to become a MLWM Advisor will now be managed under a single executive leader,” said Sieg and Aron Levine, president of preferred and consumer banking and investments, in a September memo to employees.

“Together, they will ensure there is a clear career path from onboarding to experienced advisor,” they wrote, referring to Schimpf and Gellene, who report to Sieg and Levine, respectively. 

Bank of America is scheduled to report fourth-quarter earnings results on Tuesday morning.