Merrill Lynch's newly appointed co-heads announced that they are actively responding to their sales force's feedback and making significant changes to their 2024 brokerage compensation plan. Merrill is taking steps to address two controversial pay policies.

One major change involves the elimination of a five-year-old growth grid that previously rewarded advisors for acquiring new clients and accounts while imposing yearly penalties for those who failed to achieve growth. This program led to increased client asset flows and household growth, but some departing advisors voiced concerns that the requirements were diverting their attention from existing customers.

Additionally, Merrill has decided to do away with a policy introduced in the current year that reduced advisors' credit for brokerage transactions. This change had a particularly harsh impact on advisors who heavily relied on commissions for their income. A Merrill executive shared with AdvisorHub the firm's commitment to simplifying the plan and enhancing transparency for their advisors. While Merrill has put an end to the cuts in brokerage payouts, they have introduced discount-sharing programs that will reduce compensation for individuals who heavily discount equity or options trades.

In addition, Merrill is making several other adjustments, including removing the "engagement" criteria for team members to qualify for the payout rates of their group's top producer. Merrill is also introducing a new award for advisors, with over 55 percent of their client households holding Bank of America checking accounts based on the balances in those accounts.

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