Merrill Lynch slashes broker pay


Merrill Lynch is cutting broker pay to trim costs — while at the same time providing an incentive to promote cross-selling of parent-bank products and spur growth.

Starting in January, brokers won’t be paid on all of the business they produce, Bank of America Corp.’s

BAC, +0.29%

  wealth-management arm late Thursday told its ranks of about 17,000 advisers. Instead, Merrill said it will pay brokers on 97% of their wealth-management production monthly. The amount of money an adviser will forfeit will be capped at $4,000 a month.

The changes would likely mean a 3% pay cut for the average Merrill adviser, who produces about $1 million in annual business. Financial advisers at Merrill Lynch and other brokerages typically keep a portion of what they generate through asset-management fees, commissions and other factors. In 2018, an adviser producing $1 million in annual business kept 42%, or $420,000.

Advisers will be able to recover some of the money they lose through bonuses rewarding growth and the firm said it would award top performers with extra pay.

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