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In his first interview since his shock retirement last year, the former head of Bank of America’s Merrill Lynch brokerage unit, sharply criticised the Charlotte-based bank’s strategy and priorities, Reuters reports (h/t to @katyawachtel).When Lyle LaMothe left, he cited ‘personal’ reasons. Now, he says he really left because of “philosophical” differences that emerged during the integration of Merrill Lynch’s brokers into Bank of America.
Reuters reports that the crux of the issue was an emphasis on the “goals of the bank rather than specific needs of Merrill’s brokers and clients.”
That banks would put its own interests above its clients and even a subset of its own employees is not a new charge against Wall Street, but LaMothe is one of the more senior members of the industry to publicly make it.
As the profitability of traditional brokerage services have fallen, banks have pushed their salespeople to ‘cross-sell’ more lucrative products from their commercial and investment banking businesses.
LaMothe charges that this practice does not lead to clients receiving the best advice, Reuters reports:
“I know some people can thrive in that format, but I’m not one of them…I didn’t get into the financial services business to be a commercial banker…”
“…You cannot pressure good advisers to sell a product: they simply won’t do it. It’s almost counter-productive…”
“…I’m not saying they tried to do anything untoward, but there are a lot of pots on the stove at that organisation, and I was concentrated on just one,”