Bank of America is planning to help its wealth management unit get its groove back with 2,000 new hires this year.
Inexperienced hires are more on the Charlotte-based bank's radar for 2010, reported the Financial Times yesterday, citing people close to the matter. Hiring rookies is a thrifty alternative to poaching experienced talent from rival firms, a costly endeavor.
Company spokesperson Selena Morris declined to confirm the number of hires it has in the works for this year or whether it's specifically targeting rookies or experienced personnel. "The bulk of our investments in our business are in capabilities for clients and existing advisers. In addition, we look to add quality advisers and bankers, in particular through our training program," she said.
Focusing its hiring spotlight on less experienced advisers reverses the company's move from two years ago. In an interview with FINS last month Mark Benson, head of the U.S. advisory practice management development program for Merrill Lynch Wealth Management, said while no experienced advisers were let go in 2009 "there was some paring back on some of the newer folks, maybe more like a year ago."
The 2,000-broker increase would return the firm's headcount to a level that is more on par with its competitors such as Morgan Stanley Smith Barney and UBS. The wealth management unit lost some of its thunder when hundreds of brokers headed for the exit following Bank of America's acquisition of Merrill Lynch in early 2009. Sallie Krawcheck, president of the global wealth and investment-management division, said last month the rate of departures tapered off at the end of last year and now the bank is looking to rebuild. There were a little over 15,000 advisers at the end of the fourth-quarter, according to the company's earnings report.
"We really ramped up our hiring into our training program in the middle of the summer. We've hired hundreds and hundreds of trainees in the second half of the year and look forward to continuing that in 2010," said Benson. He added they have also "hired some very big teams and big individual producers" from rival firms.
The 43-month long training program run by Benson is recognized as one of the most prestigious. Established in the late-1940s at Merrill, trainees earn their basic licenses such as the Series 7, learn about products, participate in weekly calls, and interact with clients. Some 80% of the revenue at Merrill Lynch is derived from alums of the program, according to Benson.
Meanwhile, at the firm's U.S. Financials Conference on Tuesday Morgan Stanley CEO James Gorman said recruitment has slowed down at MS Smith Barney, BofA's chief rival in this sector, describing it as "a good thing for all of us."The wealth management arm employs about 18,100 advisers and has a training program that lasts three years. Gorman said that the brokerage expects to employ 17,500 to 18,500 brokers this year, and that the training program will help support that range.
Write to Yoree Koh