Efforts to tap a new head for Merrill Lynch’s U.S. wealth management business have stalled, according to people familiar with the matter.
At issue is the ongoing clash of personalities and cultures at Bank of America, according to sources inside the bank.
The retirement of wealth management boss Lyle LaMothe was announced by the bank in early March. A new chief was expected to be named shortly afterwards. Two top executive were whispered as finalists. But then…nothing. Silence.
The official spin from Bank of America is that the bank is taking its time, not rushing an important decision. But there’s another story behind the scenes.
What happened was that different camps at the bank fought over who should get the position, according to people familiar with the matter.
Bank of America chief executive Brian Moynihan favours John Thiel, a 22-year Merrill veteran who runs its high-net-worth business. He began as an accountant at KPMG before becoming financial adviser in Tampa, Florida, which gives him some credibility as a leader of the brokerage business. But he left the retail financial advisory business for private banking over a decade ago. His critics describe him as a “products guy” who lacks any charisma.
“This is a job where you need a lot of charisma. Lyle had it in a boy-scout way. Thiel has zero charisma. Maybe negative charisma,” a Bank of America executive said.
Andrew Seig is close to Krawcheck and is her top choice for the job.
Sieg joined Merrill Lynch in 1992. In 2005, he was recruited to join Citigroup’s wealth management unit—then led by Krawcheck. When Krawcheck took the top job running the global wealth management business for Bank of America in 2009, she recruited Sieg to join her there. If he were to get the job, it would be a major victory for Krawcheck.
Negotiations within the bank seem to have ground to a standstill. A person briefed on the matter says that some executives have begun looking for outside candidates in hopes of overcoming the impasse.
This choice could be one of the most important since Krawcheck joined Bank of America. The brokerage, with 15,500 financial advisors, is the biggest business under Krawcheck’s supervision. Nearly 80 per cent of the division’s revenue last year was produced by the financial advisors.
Ever since Bank of America purchased Merrill Lynch there have been fears that many of its financial advisors would defect to rival firms.
In fact, Merrill has increased the ranks of its brokers—although it has been stung by some high level defections.
Many at Merrill blame a clash between the culture of the Merrill brokers and the Bank of America bankers for tensions at the company.
Sources say brokers complain that Bank of America is too aggressive in pushing brokers to sell Bank of America banking services and products to the financial advisory clients.
LaMothe is expected to step down on May 1.