Another Former Merrill Broker Makes His Way Back -- Street Moves

By Michael Wursthorn 

Another Merrill Lynch alumnus has returned to the Bank of America Corp.-owned brokerage, making him the latest "boomerang broker" among the four big Wall Street players.

Merrill Lynch said Thursday that Habib Yousefzadeh joined its Oklahoma City branch late in July from rival Morgan Stanley. Mr. Yousefzadeh had been at Morgan Stanley since 2009 after a seven-year stint with Merrill, according to BrokerCheck, the Financial Industry Regulatory Authority's database on brokers.

A Morgan Stanley spokeswoman confirmed Mr. Yousefzade's departure, but declined to comment further.

With about 26 years in the financial-services industry, Mr. Yousefzadeh built up a $110 million wealth practice that generated more than $1.1 million in annual fees and commissions, Merrill said.

Mr. Yousefzadeh is Merrill's latest so-called boomerang broker, or someone who has returned to a previous employer in the brokerage industry. In May, the Bank of America unit rehired Andrew Zimmerman and his team of brokers, who collectively oversaw $1.2 billion of client assets, from Morgan Stanley. Later in May, John Campanello, another Morgan Stanley broker, returned to Merrill, the firm announced at the time. Mr. Campanello managed $200 million for clients.

Brokers who move among the four big U.S. brokerages -- Merrill, Morgan Stanley, UBS Group AG's U.S. wealth unit and Wells Fargo Advisors -- are typically offered lavish recruitment packages, which can reach multimillion-dollar levels for big producers. That, recruiters say, tends to be a driver behind many brokers' moves.

But for brokers to return to a firm they once worked at hints at another point: Brokers view the big brokerages as being mostly similar. Merrill, Morgan Stanley and the others tout their differences, but their underlying services for investors are mostly the same, including open-architecture investment platforms that offer in-house and third-party investments, lending and insurance, among others.

"Most advisers see all of the wirehouses as interchangeable and, in large part, they are," said Mindy Diamond, president of wealth-management recruitment firm Diamond Consultants in Morristown, N.J. "For sure there are differences between them, but at the end of the day, they are all big bureaucracies....So, if they are pretty much all the same, then if an adviser realizes that the firm he left wasn't so bad after all, and he can get paid a transition package as incentive, why not do it?"

Merrill, for now, has one key difference from its rivals: its Merrill Lynch One platform for adviser s.

Launched in 2013, it replaced five aging platforms, each with its own fee schedule, enrollment process and website. Merrill Lynch One's single fee schedule is expected to help the brokerage comply with some of the requirements under the Labor Department's fiduciary rule that brokers put the interests of retirement savers as their guiding principle, not the suitability standard that critics said led to clients being pitched products that paid commissions to the brokers.

New Merrill hires and even brokers who recently left the firm have lauded the system, saying it cuts back on paperwork when bringing on a new client and that it is simpler to use compared with some rivals' offerings. Ms. Diamond adds that brokers have found the platform "very appealing."

It has also helped Merrill boost its fee-based assets and revenue, something the industry has been driving toward. Bank executives say the fee-based asset revenue is more predictable and steady compared with transaction fees, which can vary from quarter to quarter depending on market conditions.

Write to Michael Wursthorn at [e-mail]

(END) Dow Jones Newswires

August 04, 2016 14:09 ET (18:09 GMT)

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