Although retail investor complaints about account transfer problems outnumber any other gripe, two wirehouse executives insist transfer tie-ups are no big deal. They are just part of doing business, they say.
Stan O’Neal, president of Merrill Lynch’s U.S. private client group, told a group of reporters that incompatible computer systems are sometimes to blame. And he acknowledged that the restraining orders Merrill gets against brokers are also a contributing factor.
“There may be some specific issues related to the movement of a financial adviser from one firm to another, which may be part of [the problem],” he said in response to a question from a Registered Representative reporter. “And I think those are very individualized cases.”
As far as Merrill Lynch is concerned, account transfer problems are minor. “I’m not aware of any particularly acute problems,” O’Neal added.
John Bachmann, managing partner with Edward Jones, was even less worried about account transfer headaches suffered by investors, calling them “just part of the normal give-and-take of the business.” Such problems have not generated enough concern at Edward Jones to catch Bachmann’s attention. “It isn’t so unsmooth that it has hit my desk,” he said.
Another reporter followed up by asking O’Neal and Bachmann if they planned to follow the NASDR’s recommendation to stop the practice of freezing client accounts when brokers leave their firms.
“It’s a very competitive world,” Bachmann said. “There has always been the discussion of whether the account belongs to the individual representative or the firm, yet typically it is the firm that gets sued if something goes wrong.” He said Edward Jones always works to retain assets when brokers leave. “That’s just part of the game,” he said.
O’Neal answered the question even less directly. “I think ultimately it’s the customer who decides [when and where his account goes],” he said. “We believe we have a better capability to serve clients, so we’re going to do everything we can to convince the client that Merrill is the place they should be. But the client’s wishes, at the end of the day, dictate where the account goes.”
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