Merrill Lynch president Stanley O’Neal told several hundred brokers in Houston on Monday that the investigation by the New York Attorney General was a "political event, not a Wall Street event," according to a broker who heard the speech. O'Neal also said, according to the rep, that Merrill Lynch is "separating itself from competitors."

O’Neal, who is on a nationwide tour visiting the firms brokers and managers, said Merrill is the only one of the big firms showing a profit. In its second quarter, Merrill posted a 17 percent growth in net income compared to a year ago even as revenue declined by 11 percent. Of course, cost cutting is what drove the improved results.

According to one producer in attendance, O’Neal told brokers that the Merrill Lynch name and brand is in "a great position because if we’re showing a profit and doing this well in this bad environment, we’ll be phenomenal when things get better."

Says another rep, "We all came away with the feeling, ‘Hey, O’Neal and other guys at the top have gotten us through this more successfully than our competitors’ leaders have. So it’s obvious they’re going to help us be more successful in the future than the leaders of our competition.’"

O’Neal is not putting pressure on brokers to gather more assets in this tough environment, according to reps.

"He said the best thing to do right now is meet with clients, make them feel as comfortable as you can, have client contact," a rep says. "There was no mention of generating revenue, no pressure to produce, just to be out there making sure clients have a great experience and making feel safe in difficult time."

O’Neal informed brokers that the company is preparing a major public relations and advertising campaign, but that it is waiting for the right time. He said, "It’s not just advertising to advertise, it’s getting out there with a message that people are willing to hear," according to a rep. O’Neal wants to launch a major campaign illustrating "all the great things Merrill has done over the years for clients" and "its 100 years of history," but that "people aren’t ready to hear that yet."

"I walked away from the meeting with a better feeling, directionally, of who’s leading us, what our plan is and where we’re going," says a broker who attended the meeting. "It was very, very encouraging, and very, very inspiring."