In a new push to compete with retail brokers Fidelity and Charles Schwab, Bank of America Merrill Lynch is expanding its online brokerage business and planning to hire an additional 600 financial solutions advisors in the next three years.
The company currently has 100 FSAs for the venture, Merrill Edge Advisory Center, said Rich Steinmeier, managing director of the center. Merrill Edge grew out of a phone and customer service platform for retail investors built in 2000 for customers with less than $250,000 in assets to invest.
"The primary distinction between this role and an advisor is the FA's client base is wealthier and has complex needs," said Rich Steinmeier, managing director of Merrill Edge Advisory Center. "Our clients have more basic investing needs but still require advice."
Another key difference is that FSAs don't earn their keep through commissions like most FAs but are paid a salary, according to the company.
Fidelity and Charles Schwab dominate the market with 12.4 million and 7.9 million online investment accounts, respectively. Merrill Edge currently has 1.4 million, behind third place player E*Trade, which has 3.7 million. In 2009, online brokerages captured 17% of the overall brokerage market, all according to a study by research firm Aite Group.
BAML expects Merrill Edge to grow between 20% and 30% each year for the next three years and increase its number of accounts from 1.4 million to 2.4 million.
"I think we compete well with any of the predominantly online providers," said Steinmeier. "[When it comes] to giving actionable advice, I think we are without peer."
What Does It Take to Be an FSA?
FSAs help clients self-direct their investments but also provide recommendations and advice on securities, mutual funds and other products.
According to the company, Merrill Edge is looking for candidates who have a Series 7 and ideally a Series 66, though the bank will get applicants licensed for the latter if need be. While Certified Financial Planner and Chartered Financial Analyst certifications would be beneficial in an application (and on the job), they're not a requirement.
Steinmeier said he's looking to recruit candidates with investing experience and will bring on those who have acted in licensed roles at the firm's competitors.
FSAs receive salaries and some performance incentive, but do not earn commission and do not own books of business. Still, they'll be expected to perform similar client services as regular FAs, and will be called upon to sit down in person with clients and craft specific investment plans.
Hiring will take place across the country, but primarily in major metropolitan markets "where the bank has a large footprint," according to Steinmeier.
The ability to transition from FSA to FA is a possibility. So far, according to Steinmeier "four or five" FSAs have moved into the firm's training program for new financial advisors. "One of the explicit expectations of the program is cultivating people who can grow into an FA role with Merrill," he said.
Write to Julie Steinberg