Bob Mulholland, second-in-command in Merrill Lynch’s brokerage unit, has left the firm, Registered Rep. has learned. Mulholland’s retirement was announced internally on Oct. 26, according to a firm spokesman. The move is somewhat of a surprise, because Mulholland, co-head of the group’s Americas region, has been with Merrill since 1979 and is considered “a legend” among long-time veterans of the firm.

“There were managers who felt bad that we were losing him,” says one advisor at Merrill. “His reputation is quite good.”

Advisors spoken to said the salesforce was upset at his departure. Many said it is unclear whether Mulholland was seeking to retire—he is in his 50s—or whether there were disagreements between him and the rest of management at the firm that resulted in him being pushed aside.

For the last two years, Mulholland has, along with H. McIntyre “Mac” Gardner, been co-head of the private client group’s Americas region. Mulholland was a long-time brokerage hand, while Gardner has served in a variety of management roles since 2000.

Gardner previously was in charge of private client’s global restructuring in 2000 and 2001, and was more recently overseeing manufacturing and distribution, while Mulholland was overseeing field operations. Gardner is now the sole head of the global private client group, Americas division, and a spokesman said that the rationale “that [private client head] James Gorman made was that this was a step to streamline the management structure.”

When asked if that meant Mulholland was forced out, he said: “The announcement was a retirement, so I wouldn’t characterize it beyond that.”

An internal memo from Gorman praised Mulholland for advancing “the growth and development of our business—and the benefits of his leadership will be long-lasting.”

But some believe his leaving is another step by Merrill Lynch CEO E. Stanley O’Neal to continue to revamp management at the brokerage arm, as he did when he headed the private client group himself. Since becoming CEO, in August 2003, O’Neal brought in Robert McCann to oversee several divisions, including global private client, adding a layer of management between himself and Gorman.

“There’s a tremendous amount of cultural tugging and pulling and eventually, maybe, some new things have to be done,” says Stephen Winks, a Richmond, Va.-based consultant. “We’re at that point where we’re liable to see almost anything happen in this business.”

Long-time advisors have lamented the changes in the industry that have resulted in former brokers no longer among the ranks of those who head firms. Morgan Stanley, Merrill Lynch, UBS and Smith Barney are all overseen, respectively, by people whose principal backgrounds were not in brokerage. Some analysts say that doesn’t matter, with the industry becoming more wealth management oriented and less sales oriented. However, there is a feeling that the cost-cutting approach to brokerage management is hurting sales forces across the industry.

“It was as ugly as it gets,” says one associate of Mulholland’s, who does not work at Merrill but spoke to him Tuesday. “He was the last tie to the field.”

A call to Mulholland’s office in Plainsboro, N.J., was not returned.