Merrill boasts of 75% graduation rate for its advisor training program

Merrill for the first time is releasing graduation estimates for its recently revived training program and is predicting a far higher success rate than has ever been common in the industry.

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On a call with reporters Tuesday, Merrill Head of Client Service John Towey said roughly three-quarters of the fledgling advisors now enrolled in its training courses are on track to graduate. And when they do, they’ll be managing $64 million in client assets, on average.

If Merrill executives’ predictions hold true, their success at bringing new blood into the industry will far exceed the 30% graduation rate typical for most training programs. Merrill has long enjoyed a reputation for “training the Street,” but had let such endeavors into abeyance for years before restarting them in 2021. The firm repeatedly put the number of enrollees in its training programs at around 2,400 but, until now, has deflected questions about likely graduation rates.

READ MORE: Top Merrill brokers credit firm’s training program for career success 

How Merrill is increasing its odds of training success

On Tuesday’s call with reporters, executives said they’ve increased their chances of success by moving faster to give new advisors full access to the firm’s broad array of products and services, allowing them to join teams with older advisors and providing more business support. The firm has also devised a new designation — an advisor development program client associate.

“This role creates an additional entry point into the profession and allows trainees to begin their careers working in a Merrill office alongside advisors,” Towey said. “It provides earlier exposure to client service, practice management and day-to-day operations of an advisory business.”

About 25 trainees now have the new designation, according to Towey. After roughly 13 months, they can graduate to become advisor development program financial advisors, which gives them access to the firm’s full range of services and calls on them to develop plans for bringing in new clients and assets. They stay at that designation for as long as four years before becoming full-fledged advisors.

Louis Diamond, the CEO of the recruiting firm Diamond Consultants, said many wealth managers have backed away from training advisors in recent years — in part because the failure rates for industry newcomers have tended to be abysmally high. Even among advisors who do make it through an initial training program like Merrill’s, many still drop out after finding they don’t know enough potential clients or lack the personal tenacity to build a solid book of business.

He said Merrill is at an advantage with its direct connection to Bank America, which can help novice advisors build their books of business by sending them bank customers.

“A lot of the trainees get staffed in bank branches, and then they get referrals,” Diamond said.

READ MORE: UBS bets on advisor training while CEO gives reality check on profits 

Merrill’s return to recruiting also bringing in assets

Alongside its training program, Merrill has re-established a priority on advisor recruiting. Its new emphasis on pulling advisors from industry rivals has resulted in some notable successes.

Last week, for instance, Merrill reported it had recruited a four-member team that had managed $1.5 billion and produced $4.3 million a year for Morgan Stanley in Boulder, Colorado. The leader of the team, Todd Hatfield, had spent his entire 25-year career either at Morgan Stanley or Smith Barney, which Morgan Stanley fully acquired in 2013.

But recruiting remains an expensive endeavor. Firms often persuade advisors to change firms in part by offering them upfront loans often for as much as three or four times their previous year’s revenue production. 

In 2025, Merrill saw its balances of outstanding recruiting loans increase by 48% year over year to $374.5 million. Advisors typically don’t have to pay back recruiting loans as long as they stay at their new firm for a set number of years.

Like many large wealth managers, Merrill and its parent, Bank of America, have ceased publicly reporting their advisor headcounts. When last announced, the number had stood at around 18,000.

Eric Schimpf, co-head of Merrill Wealth Management, said on the call that recruiting at Merrill remains important but is “not a pillar of our strategy.” 

“You’re not going to grow your advisor force at scale through external recruiting,” he said.

READ MORE: Merrill underlines recruiting ambitions with $2.2B advisor pulled from JPMorgan 

Merrill declines to break down new households from training, recruiting

Towey said several thousand new client households have been brought to the firm through the training program. Bank of America separately reported that it added more than 6,000 clients with $500,000 or more in assets in the second quarter alone.

Lindsay Hans, also a co-head of Merrill Wealth Management, declined to delineate how many of those came from recruiting and how many from trainees.

“What we will say, all of those things contribute,” Hans said. “So when you look at our build in recruiting, especially as you see the last couple years, the hires we’ve had in the last quarter, our pipeline is the strongest that we’ve seen it. 

“So all of that is driving growth in our new households as well as our client balances,” she added.

READ MORE: Merrill execs to investors: We’ll bring in $150B in new assets a year 

New assets, record revenue and skyrocketing net income

Despite the inflows from training and recruiting, net new assets for Merrill and Bank of America’s private bank, which fall under Bank of America’s Global Wealth and Investment Management division, dipped by 4% year over year in the second quarter to $13.7 billion. Net new assets are often considered a key gauge of wealth management firms’ success, since they include only assets brought in from new or existing clients and not investment gains.

Even with the decline in net asset inflows, Merrill and the private bank’s total client balances — which include investments, loans and bank deposits — were up by 12% year over year to $4.9 trillion. The units’ assets under management, which are particularly prized for their ability to generate steady fees, were up by 17% to $2.3 trillion.  Beyond new asset flows, Bank of America reported in an earnings presentation that the increases were “driven primarily by higher market valuations.”

The higher client balances helped drive the wealth units’ revenue up by 16% year over year to a record of $6.9 billion. Of that figure, $4.4 billion came from asset management fees, which were up 19% year over year. 

With expenses subtracted, Global Wealth and Investment Management division’s net income came in 42% higher year over year, at $1.4 billion. The division’s efficiency ratio — the proportion of its revenue eaten up by expenses — fell by 5 percentage points year over year to just over 72%.

Schimpf said Merrill and Bank of America’s other wealth units see a strong opportunity in working with current commercial banking clients who may be looking to sell their businesses soon.

“The amount of wealth being created and transferred is greater than anything we’ve ever seen in prior generations, and with that comes obviously a growing demand for advice,” Schimpf said. “Many will face levels of financial complexity they have never navigated before, creating a significant opportunity.”