Bolton is leading firm for recruiting Merrill Lynch Advisors

The future of Merrill Lynch Wealth Management’s international business is in question as it could lose up to $8 billion in assets under management as a result of cuts announced last year.

Last July, the Bank of America-owned global wealth manager restructured its overseas wealth management unit, with expectations that it would lose around 10% [around $1.2 billion] of the $12 billion to $13 billion of assets under management it had at the time, according to sources close to the situation.

This restructure saw it increase investment minimums across its accounts and zone in on the ultra-wealthy in a trimmed down list of 29 designated countries, with a focus on Canada and Latin America.

Over the last 12 months, Citywire Americas has reported on 16 teams departing the firm [see table below] which managed more than $8.16 billion in client assets while at Merrill Lynch. If all those clients follow their respective advisers Merrill Lynch could actually see over 60% of assets exit.

While its international advisory assets pales in comparison to the $2.4 trillion it runs in US domestic accounts, a withdrawal of $8 billion in client assets raises questions over its commitment to the US offshore market.

The firm has not published any new numbers or announced advisor recruits, but sources revealed the unit is now managing around $10 billion in assets – a drop of 17% for the lower estimate or 23% for the higher one.

Merrill Lynch has declined to comment to Citywire Americas on how many assets it has lost, or acquired, since its restructure announcement and it seems unlikely to issue a statement until December or early 2017 – the final deadline by which any Merrill Lynch accounts outside the designated 29 countries must be closed.

Going indie

The pool of wirehouses and international banks has been shrinking over the last few years with Barclays, RBC and Credit Suisse having left the scene. Even wealth management giants like Morgan Stanley have had to run with the times and make changes to serve higher net worth clients.

This has allowed international broker-dealers and RIAs such asBolton Global Capital, Snowden Financial Partners and Global Investor Services to earn a bigger slice of international advisory pie.

The challenge for these firms, Lopez said, lies in proving their strong credentials and reputation to these prospective clients.

Bolton’s chief executive Ray Grenier, however, is confident that the six teams his firm has recruited so far from Merrill Lynch will be successful in bringing over the bulk of their client assets.

He said that the firm has typically found 60% of assets move in first six months, 80% within nine months and 90% within 12 months. The total amount of client assets Bolton stands to gain adds up to over $1.4 billion to date, said Grenier.

Big brand name is no longer synonymous with a good reputation, he added.

‘The capabilities of the independent side now match or exceed those of the major firms or wirehouses. In terms of clearing and custody, financial safety and security, and technology what independent firms offer is good, if not better.’

Grenier said: ‘Brand names meant something, but since 2008 these names have been tarnished and don’t have the same cache for clients as they used to and clients are much more willing to entertain these types of relationships.’

The departed:

Names AUM (in millions) Date moved Moved to
Lorenzo Esteva and Alejandro Malbran $275 Nov-15 UBS
Graciela and Jorge Perez $270 Nov-15 Bolton
Michael Wu $355 Nov-15 Morgan Stanley
Rick Leyva $200 Dec-15 Snowden
California advisors $4,000 Early 2015 UBS
Eugenio Arango $400 Jan-16 Raymond James
Miguel Sosa $400 Jan-16 GIS
Eduardo Robson, Daniel Aymerich $180 Feb-16 Bolton
Michael Sauerborn $325 Mar-16 Raymond James
Eric Beiley $570 Apr-16 Raymond James
Edilberto Moreno and Soraya Batista Garcia $160 May-16 Bolton
Alvaro Uribe and Andres Echeverri $170 May-16 Morgan Stanley
Sam Moshe $290 May-16 Morgan Stanley
Alex Astudillo $173 May-16 Bolton
Felipe Ballestas $175 Jun-16 Bolton
Tanya Duarte and Archibaldo Vasquez $225 Jun-16 Bolton

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