Sieg, currently the head of retirement solutions at the bank’s global wealth and investing unit, is taking over the role on January 1. He is replacing John Thiel, who is 56 years old and staying within Bank of America as vice chairman of the global wealth unit.
“This will be a seamless transition,” Sieg said in an interview with The Wall Street Journal. “Our hope is that the organisation won’t skip a beat.”
Sieg, a 24-year Merrill veteran, has played a key role at Merrill in recent years, helping with the rollout of Merrill Lynch One, an adviser technology platform that simplified how clients open an account and pushed more advisers to work with investors through fee-based relationships, and with preparing for the Obama administration’s new rules requiring brokers to put the interests of retirement savers ahead of their own.
He was also considered a candidate for the top job at Merrill in 2011 before Thiel was eventually named.
Thiel, who is stepping down for personal reasons, presided over some of Merrill’s biggest changes since it was acquired by Bank of America in 2009. He pushed brokers to ditch their stock-picking roots and become advice givers to investors. Instead of focusing on selling investment products or stocks, Mr. Thiel pressed brokers to create financial plans and offer banking products, such as checking accounts and mortgages.
He also raised client minimums so that Merrill brokers focused on finding and serving clients who had at least $ 250,000 in assets. Clients with assets less than that are directed to Bank of America’s online brokerage, Merrill Edge.
Amid those changes, Thiel was known to encourage brokers to take a healthier approach to their own lifestyles, once challenging brokers to find their “noble purpose,” while they drank freshly squeezed wheatgrass.
The changes rankled some of Merrill’s old guard, long known as the “Thundering Herd”. Some former Merrill brokers decried the added banking duties, saying it added more to the bank’s bottom line than to their relationships with clients.
Merrill’s revenue grew to $ 14.9 billion in 2015 from $ 12.4 billion in 2010, and its pretax profit margin, a key metric, rose to 22.6% last year from 15.6% five years earlier. The brokerage unit has faced headwinds in recent quarters though, with market volatility weighing on revenue.
Reflecting on his time at the helm of Merrill, Thiel acknowledged the last several years haven’t been “calm” as changes were implemented and the industry coped with new regulations and competition.
When the Labor Department unveiled its new retirement rule in April, Thiel said he felt it offered a chance for him to transition to a less time-intensive role. Soon after, he spoke with Terry Laughlin, a Bank of America executive who earlier this year took over wealth management, about stepping down.
“I felt very good about where we are,” said Thiel. “So I said to Terry, ‘Let’s get this [rule] through next April, and it’s great Andy can do this.’”
Sieg will face the task of getting Merrill’s herd ready for the new retirement rules, which will start to take effect in April. The rules are forcing brokerages, including Merrill, to rethink how they will work with retirement savers, especially those who pay for each transaction made in their individual retirement accounts.
Laughlin acknowledged the work done by Messrs. Thiel and Sieg, such as the rollout of Merrill Lynch One, as already putting Merrill in a good position to comply with the new retirement rules. “Two and a half years ago, Andy and John saw this coming and we made the technology investments needed,” Laughlin said.
“The optimism for this business and the future of the industry runs very deep at Merrill,” Sieg said. “These are the best days for this business.”
Write to Michael Wursthorn at Michael.Wursthorn@wsj.com
This article was published by The Wall Street Journal