Merrill Bullish on Region

Merrill Lynch’s Rogers branch, with more than $1 billion in local assets under management, is bigger than all but three of the 121 banks that are chartered in Arkansas. Only five of the 107 state-chartered bank holding companies are even that large.r

Brett Thelander, director of Merrill’s Oklahoma/Northwest Arkansas district, said the local office is not “the crown jewel” of his seven-branch district just because it boasts 3,300 clients or it’s “the most productive on a per-fee basis.” He said Merrill’s 15 Rogers brokers and seven-person support staff simply do service “right.”r

Despite an aggressive growth initiative for its newly formed Rogers “hub,” a $1.2 billion companywide technology rollout and a ballyhooed holistic wealth-management program called “Total Merrill,” Thelander said the branch’s future success will continue to hinge on the same thing that’s already made it “a company all-star.”r

Wealth management, he said, is still “all about the relationship.”r

“In the 1930s, the broker was referred to as ‘the customer’s man,'” Thelander said. “When I speak to young financial advisors around our system, I remind them of that. I say, ‘No one is going to pay you unless you perform for the customer. You have to be their advocate.r

“The best way to explain why our Rogers office is the most successful in the two-state area is to say all 15 of our financial advisors here get that. They have all qualified for the Merrill Service Club. That designation is based on productivity and client feedback about competency and capability. In an average office, 25-30 percent of our FAs make that club. Here, it’s 100 percent.”r

George Westmoreland, Merrill’s senior vice president in Rogers, said about 35 percent of the branch’s clients account for about 80 percent of the assets it represents. One enthusiastic local customer is Kendall Schwindt, a Wal-Mart executive for 26 years before retiring 19 months ago.r

Schwindt said he’s been “real pleased” with the service given by Brent Henry, Merrill’s resident manager in Rogers, and Pam Raben, a senior associate. Henry, like Thelander, is a wealth management advisor and a certified investment management analyst (CIMA).r

“Merrill brings diverse investment vehicles forward that I hadn’t even heard of that are making a real difference in my portfolio,” Schwindt said. “They don’t push me. If I go in with a question, I come back with options. I can’t say enough about the attitude and expertise of everyone down there. I looked into several firms, and I’m with Merrill.”r

Westmoreland said a summer restructuring of the firm’s local resources into one regional office has dramatically improved its level of service. The move closed Merrill’s Fayetteville branch, but Westmoreland called it more of an “expansion” than a “consolidation.”r

“We realized a few years ago that we can have our people on every street corner, but the cost of that hurts the level of service we can give clients,” Westmoreland said. “If we’re within 20 minutes of every client we have in Northwest Arkansas, we feel like they’ll make that drive if, when they get here, they see the service we provide is extraordinary.r

“The guy who’s retiring with $100,000 may not have a need for all the services we offer. But the guy with $10 million might, and there’s all kinds of people in between who we can help by maximizing our synergies and bringing ‘Total Merrill’ to them.”r

The “Total Merrill” mantra is detailed at length at www.ml.com, but it encompasses everything from “beyond banking” account features to retirement planning to mortgage services. There are tiered segments of service for clients with under $100,000, $100,000-$10 million and the folks who fall above that.r

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Regionalized, Energizedtr

The Milken Institute, a nonprofit California think tank, in June rated the Fayetteville-Springdale-Rogers Metropolitan Statistical Area as the best performing city in America for job and economic growth. Henry said Merrill took notice at the corporate level, and the firm has responded with major infrastructure investments.r

Henry said Merrill plans to add 12 new financial advisors in Rogers within a year. That will likely include specialists in areas such as trust management or business financial services.r

The additions would give Merrill 37 registered representatives from the Arkansas River Valley to Benton County, counting the 10 brokers it has in Fort Smith. The firm has also upgraded its continuing education program, sending financial advisors such as Henry and Jay Brain to the Whorton School of Business or to receive CIMA designations. Thelander and Westmoreland called Merrill’s new training requirements “rigorous.”r

“There was a time when you might take a guy right off a used car lot and make him a broker,” Westmoreland said. “Nowadays, you have to be a pretty advanced professional. We’re going to be sending even our youngest advisors to pursue CFAs, CFPs and CFMs.”r

Henry said Rogers has a strong intern program where candidates can earn degree credits. He also said the public would be surprised at the number of inquiries the firm gets from lawyers, accountants and bankers who want to be part of “Total Merrill.”r

The branch is using savings brought by its restructuring to increase its philanthropic efforts by becoming the lead sponsor for the “Leave A Legacy” campaign. It also sponsors Polo in the Ozarks, a benefactor of Lifestyles Inc. r

Another local upgrade includes Merrill’s facility at Village on the Creeks. It’s being expanded from 6,500 SF to 11,000 SF to accommodate 15 new offices. A big part of that multimillion-dollar project entails incorporating the high-speed connections and equipment needed to ready the office for Merrill’s 2004 technology rollout. Thelander said the initiative will put the equivalent of a Bloomberg terminal on every financial advisor’s desk.r

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Merrill Meets “AI”r

Bloomberg systems can cost as much as $1,800 per month, although there is a multiunit discount. But Merrill has been able to partner with Thompson Financial Corp. on a hardware and software platform and Siebel Systems Inc. on a unique client-contact management system.r

Thelander said basically bringing the technology gurus in-house saved gobs of money and produced what could be considered Merrill’s own version of “artificial intelligence.” The process makes use of Monte Carlo simulations (see commentary, p. 24) and a variety of other complex tools.r

Thelander said during the next year Merrill financial advisors will sit down at their computers, and within minutes the system will cross reference a complex array of financial data and make real-time suggestions regarding all types of asset allocations.r

“It might pop up and say, Mr. Jones can refinance his house today at no cost because rates have reached a certain point and he has ‘X’ amount of equity or whatever,” Thelander said. “It’s going to be a lot more timely information to keep us on top of our clients’ portfolios.”r

Henry said the firm will be able to create “comfort zones” for clients that analyze the probability of success and failure in a myriad of financial plans. He said if the probability of success is below 75 percent, there’s probably too much risk involved. Or, if it’s above 90 percent, it may be too conservative.r

“We’ll be able to look at a 30-50 year snapshot for a client and make assumptions like, in the year 2012 the client is going to have a kid going to college and that should add an expense for $10,000,” Westmoreland said. “We’ll plug it all in and account for variables like the death of a spouse or even potential turns in the market.”r

Westmoreland, who earned a Bronze Star in Vietnam while serving as an Army captain, worked for Johnson & Johnson in Wichita Falls, Texas, from 1970-73 and spent nine years in banking before Joining Merrill Lynch in 1982.r

He said companies still used “pen and ink” to get statements out when he first entered the industry. Now, clients want a “family CFO” who can address the overall picture of financial health and, when needed, call in a specialist.r

“You can’t just be a stock jock anymore,” Westmoreland said. “You’ve got to be a pretty good accountant, a pretty good lawyer and have the ability to digest information quickly and make it useful to the client. That’s what ‘Total Merrill’ does. We have floors of lawyers and accountants. A lot of [banks and insurance companies] are getting into financial planning.r

“Those are the training grounds for our new clients. The ones who have sophisticated needs will eventually come to us. We obviously don’t have every answer, but we have a global team with the most diverse package of products that’s out there.”r

Merrill has 635 analysts in 19 countries and 23 “industry teams” that provide global industry-specific research and analysis on targeted industries. The company is rated among the Top 5 financial firms in every research category by the Wall Street Journal or Institutional Investor.r

Last year, Merrill’s global stockholders’ equity climbed to $22.86 billion, up 14 percent from $20.01 billion in 2001.