Merrill Lynch today announced a firm-wide reorganization that introduces a new reporting structure while silencing rumors that retail brokerage head Bob McCann may have been on his way out.
In a memo to all Merrill employees, Ahmass Fakahany and Greg Fleming, newly appointed co-presidents of Merrill,said the firm has introduced “a flat management structure that integrates our leadership team across the firm, and around the world.” The top executives within each business line, including McCann, will now report directly to Fleming and Fakahany. Previously, McCann reported directly to Merrill CEO Stan O’Neal.
A Merrill spokesman declined to comment on the reorganization. But a source familiar with the matter says Merrill believes the reshuffling and increased collaboration among top execs will help better integrate Global Markets and Investment Banking and Global Wealth Management (GPC and its investment in BlackRock) and better position the firm for growth.
Under the reorg, the firm also named Navtej Nandra chief operating officer of GPC, switching him over from being COO of GMI. The move is aimed at leveraging his strong background in retail brokerage to not only help run the business but also improving the integration between GPC and GMI, the source says. Colbert Narcisse, a former investment banker who had been COO, will be taking a senior position in GMI.
In addition, each business line has formed a new executive committee. For GWM, the committee includes Eva Castillo, head of Private Client EMEA, Mac Gardner, head of Private Client Americas, McCann, president of GPC, Dan Sontag, head of Americas Client Relationship Group and Nandra, chief operating officer and head of strategy for GPC. Navtej will report to McCann, Fleming and Fakahany. Sontag will continue to report directly to Gardner. The rest will report to McCann.
The promotions for Fleming and Fakahany came as Dow Kim, who had been global markets and investment banking co-president with Fleming, tendered his resignation to go launch a hedge fund. When the press release announcing their heightened roles didn’t mention McCann, rumors swirled about a possible successor being groomed to take over Merrill’s retail brokerage operations. But, the rumors proved to be untrue.
While it’s too soon to determine what impact the reorg will have on Merill’s army of 15,880 financial advisors and 680 branch offices, the firm has a history of setting the bar high. A previous reorg that took place in 2004 helped produce record profits. In 2006, the firm’s pretax profit margin stood at 21 percent and its annualized revenue per advisor totaled $742,000.