Merrill Lynch has revamped its account-distribution policy as part of its settlement of a class-action sex discrimination lawsuit. The new policy establishes six criteria to determine which brokers are eligible for account distributions.
A January memo sent to Merrill reps explained that managers were directed to choose four of six firm-defined criteria in determining account allocations for their offices (see "Merrill's New Account Distribution Criteria," Page 30). Financial consultants who meet two of the four criteria are eligible for reassigned accounts, walks-ins, call-ins and manager referrals. Brokers will be ranked based on the criteria, and account distributions for each office will be published on the firm's workstation.
Managers were told to implement the policies by the end of last year.
Like most firms, Merrill had given branch managers discretion to reward brokers with accounts. That led to allegations that women reps didn't get a fair share.
Attorney Linda Friedman of Chicago-based Stowell & Friedman, who represents women in the class-action suit, views Merrill's new policy as a victory for both female and minority reps.
"With this new policy, there is no way branch managers can skip over someone deserving and focus on their favorites, their 'golden boys,'" Friedman says.
According to Merrill's memo, "The policy is part of our continuing commitment to provide an environment that promotes fairness."
Branch managers must chose four of the following six criteria for their offices. Brokers must meet two of the four to be assigned accounts.
1) At or above the minimum criteria in financial planning points.
2) At or above the national median in Masters contest points.
3) Recognition club membership.
4) First, second or third quintile in growth of "priority" households (accounts with combined assets and liability products of 250,000 dollars).
5) First, second or third quintile in growth of fee-paying products (measured by absolute assets or percentage growth).
6) First, second or third quintile in production growth (either absolute dollars or percentage growth).