Bank of America’s Merrill Lynch Wealth Management said that starting next year, it will give advisers more credit toward earning bonuses for recruiting clients worth $25 million than it will for recruiting clients who have less money.
The firm’s 2019 compensation plan introduces a credit system that rewards brokers with four credits for new clients who have $25 million or more in assets, three credits for clients with $10 million- $25 million, two credits for clients with $2.5 million - $10 million and one credit for clients with $250,000 - $2.5 million.
It is an evolution from the carrot and stick approach introduced in the firm’s 2018 compensation plan, which rewarded brokers for recruiting more new clients and penalized them, by docking their base pay, for failing to recruit a minimum number.
Andy Sieg, head of Merrill Lynch Wealth Management, said the 2018 plan worked so well at boosting new client acquisition that Merrill is on the hook to pay its brokers more than it planned.
“We are paying out more than we anticipated, and we are happy about it because we are seeing more progress on client acquisition and net flows,” Sieg said on a call with reporters.