Sixty percent of all new trainees at Merrill Lynch Wealth Management are being hired into the firm's Team Financial Advisor (TFA) program, an alternate 31-month education track to the firm's traditional 43-month Practice Management Development (PMD) program.
Under the new model, launched in August, advisor teams hire trainees into the TFA program directly. In the past, the firm hired trainees based on an application process and then they could choose to join a team once in the PMD program.
“This is really the teams’ voting of confidence in the program, which there is no better test from the standpoint of success,” says Racquel Oden, head of advisor strategy and development for Merrill Lynch Wealth Management. She said 600 trainees have transitioned or have been hired into the TFA program so far. Merrill has over 3,000 trainees at various levels of development.
The new program is not replacing the traditional PMD route, which graduated 103 trainees during the thrid quarter and 320 year-to-date, Oden says. “There is no intent to phase out anything," she says, adding the PMD and bank advisor training programs remain in place as options for those interested. “We really have broadened our definition of ways you can enter this business and be successful at Merrill.”
Participating advisor teams can apply for a TFA trainee specializing in one of six concentration areas: business development, planning, investments and financing, relationship management or business management.
Oden says one of the more popular tracks is the planning specialization, which is designed for teams looking to add individuals who either have a CFP or will have one by the end of the program. “This really provides the team the opportunity to round out a skill set and bring a unique piece to complement the current model and practices of the teams in existence,” Oden says.
The TFA program was built based on Merrill’s existing advisors saying they needed support in order to align their practices with the firm’s goals-based planning initiatives and optimal practice model.
For Merrill's advisor teams participating in the program, they conduct interviews with potential trainees to ensure there’s a skill set alignment before selecting trainees for the TFA program. Prior to the application process, teams must undergo a full business analysis.
While in the TFA program, trainees must meet team performance hurdles, rather than individual hurdles and their performance is analyzed differently than the existing PMD metrics. But TFA trainees still will be compensated on a salary plus commission model, which the firm pays.
“We are paying the salary for the full time they’re in the program, which is somewhat what we do through our traditional program,” Oden says. “After the two years, the trainee gets equity into practice, which is the team giving that, not the firm.”
For the existing advisors at the firm, the intent of the team-based program is to grow their practice by adding a junior advisor, who will play a specialized role long-term.
“There’s no payment going to the FAs,” Oden says. “It’s just the commitment of them saying, 'If I bring on this person, my overall practice will be stronger and grow.'”
