Merrill Sets Ambitious Goal: $150 Billion a Year in Fee-Producing Assets
Merrill is setting a goal of bringing in as much as $150 billion a year in fee-producing assets as a key revenue booster, according to Eric Schimpf, president and co-head of Merrill Wealth Management. Schimpf laid out this vision at a Bank of America Investor Day event held Wednesday in Boston.
Merrill’s parent, Bank of America, is under increasing pressure to show results comparable to those of other major U.S. banks. This pressure has prompted CEO Brian Moynihan and other executives to present their growth strategies directly to investors for the first time in nearly 15 years.
**Driving Organic Revenue Growth**
Schimpf explained that Merrill plans to strengthen Bank of America’s overall performance by targeting 5% annual “organic” revenue growth. Unlike growth caused by rising stock and asset values, organic growth refers to new investments gathered from both new and existing clients.
Merrill’s wealth management executives are aiming to bring in $135 billion to $150 billion per year in accounts that generate fees based on a percentage of assets managed. These fee-producing accounts are highly valued for their ability to provide steady income streams.
In the most recent quarterly report, Merrill noted it held just over $2 trillion in fee-generating assets, bolstered by $24 billion in net new assets during that three-month period. “Over the last few years, we’ve generally been operating in line with the industry when it comes to net new asset growth, and we think we can do better,” said Schimpf.
Schimpf highlighted three priorities for driving growth:
1. Winning more clients, and winning them faster through Merrill’s unmatched lead generation sources.
2. Growing every aspect of the financial advisor force.
3. Continued investment in technology to serve clients and boost productivity for advisors and support teams.
**Improving Profit Margins Through ‘Cross-Selling’**
Schimpf also revealed plans to increase Merrill’s profit margin by four to six percentage points. Last quarter, Merrill and Bank of America Private Bank together — the group’s Global Wealth & Investment Management segment — reported a pretax profit margin of about 25%.
Key to improving this margin, Schimpf said, is Merrill’s ability to deliver comprehensive banking and lending solutions to its clients. This approach, known as cross-selling, allows Merrill to leverage its banking ties to offer lending, savings, and other services, thereby generating new sources of revenue. It also helps retain clients, as moving to another institution would require untangling several financial relationships.
Lindsay Hans, Schimpf’s fellow co-head of Merrill Wealth, added that business often flows the other way as well — from the bank into wealth management units. She noted that Bank of America serves 45,000 businesses employing around 69 million people. “For a large subset of them, they’ve established their relationship with Bank of America through a door other than [Global Wealth & Investment Management],” Hans said. “Their needs will evolve into looking for a fully advised wealth management relationship.”
Last quarter, Bank of America cited banking services offered through Merrill and other wealth management units as a significant driver of its $6.3 billion in segment revenue — a record and a 9% year-over-year increase. The balance of client loans also rose 11% year over year to $253 billion. Merrill and Bank of America Private clients opened 26,000 new bank accounts in the third quarter alone.
**A $10 Trillion Opportunity**
Looking at the future, Schimpf estimates there are roughly 11 million Bank of America customers who could benefit from Merrill’s wealth management services, yet only 1.5 million currently work with Merrill. “We estimate those clients, who are not part of wealth management today, have at least $10 trillion dollars of investable assets,” he said. “Capturing just 1% of that would mean $100 billion in client flows — that alone is 2% growth toward our 4% to 5% target.”
**The Role of Financial Advisors**
Merrill’s strategy to attract new assets depends heavily on its advisor workforce. While the company hasn’t updated its official headcount since January 2024, Hans said the current number is just above 15,000 advisors.
Merrill is working to rebuild its advisor workforce through targeted recruiting of experienced teams and a training program currently serving around 2,400 newcomers. Technology is also a major focus, with new efforts to boost advisor productivity through advances in artificial intelligence and machine learning.
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