Deals & People October 22, 2008

Bank of America Fills Out Leadership Team

Bank of America today announced that Bob McCann, currently vice chairman and president of Global Wealth Management at Merrill Lynch, will be head of the combined financial adviser organization.
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Bank of America also announced the other members of the Global Banking, Securities, and Wealth Management leadership team that will be in place when the merge with Merrill Lynch & Co. is complete.

As previously announced, Merrill Lynch Chairman and CEO John Thain will be president of Global Banking, Securities, and Wealth Management (see Thain To Head Wealth Management at Bank of America). Bank of America said the leader of Global Wealth and Investment Management will be determined in the future “as the company works to define the target environment through the transition process.’

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Greg Fleming, currently president and COO of Merrill Lynch, will head Global Corporate and Investment Banking, which will include commercial banking, according to a Bank of America press release. He will operate from New York. David Darnell, currently president of Global Commercial Banking, will continue as head of Global Commercial Banking, reporting to Fleming and will operate from Charlotte, North Carolina.

Tom Montag, currently global head of Sales and Trading at Merrill Lynch, will be head of Global Markets, which includes sales, trading, and research. He will operate from New York. Capital Markets will report to both Montag and Fleming.

Bank of America said Peter Kraus, executive vice president of Global Strategy at Merrill Lynch, decided to leave the company after the merger “to pursue other opportunities.’

Keith Banks, president of Global Wealth and Investment Management at Bank of America, will be head of U.S. Trust and Columbia Management, operating from New York. Cathy Bessant, president of Global Product Solutions at Bank of America, will be head of Global Product Solutions for the combined companies, operating from Charlotte. Jim Kelly, Business Executive—Technology and Operations at Bank of America, will head technology and operations support for all of Thain’s businesses, and will also operate from Charlotte.

“With these talented individuals and others who will be announced as we move forward I am more than ever convinced that we will be the world’s premier financial services company,” Thain said, in the release.

Data & Research October 22, 2008

Advisers Remain Confident—Especially about Business

Most advisers are telling clients to weather the storm, according to the latest Brinker Barometer.
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The Brinker Barometer by Brinker Capital gauges financial adviser confidence in the economy. The survey for Q3 found that 61% of advisers are suggesting no changes to their clients’ investments. Twenty-eight percent of advisers are looking into alternative strategies to ensure diversified portfolios. A smaller percentages of advisers are shifting clients’ funds into less risky investments (8%) or aggressively pursuing the equity markets (3%), according to the survey.

Advisers said their clients are most concerned in this market environment about an insufficient stimulus to calm the markets (65%). Clients are also concerned about potential tax rate increases (16%), a weak U.S. dollar (9%), and inflation (9%).

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Many of the respondents still seemed relatively confident in the market, as of September. Nearly half (46%) of advisers are somewhat confident in the outlook of the country’s economy and 14% are highly confident. The outlook of the stock market garnered similar responses, with 48% of advisers saying they are somewhat confident and 12% are highly confident in its performance.

The thing advisers are most confident about? Their own practices. Fifty-six percent of advisers are highly confident in the future of their practice, and 31% are somewhat confident. Almost half of advisers (48%) expect their business to grow by more than 10%, and 32% expect their business to grow by 5% to 10%.

Retirement Readiness

Slightly more advisers expect their clients to have to work past traditional retirement since the first quarter’s survey (see Advisers Say Extravagance, Procrastination Hinder Retirement Savings). The majority of advisers (76% to 100%) said only 1% of their clients will have to work in retirement, according to the survey. However, the next largest group of advisers (51% to 75%) said 19% of their clients will work in retirement. About 25% to half of advisers expect a larger chunk of clients (36%) to work past traditional retirement age.

Procrastination has also taken the lead (ironically, perhaps) as the number one obstacle to retirement savings, according to 28% of advisers. The next largest obstacle is extravagant lifestyle, followed by healthcare costs (20% and 16% of advisers, respectively).

Political Persuasion

Advisers were split on their feelings out the so-called bailout plan. Fifty-one percent said the U.S. Treasury’s proposed $700 billion bailout of private enterprise is not a fair use of tax dollars; 49% said it is. The large majority of advisers would like to see increased regulation of financial institutions (78%), according to the Brinker Barometer.

As the country heads into an election, more than half of advisers said it wouldn’t be feasible to continue the Bush tax cuts because of the government’s financial bailout of Wall Street. The majority of advisers (76%) think that Senator John McCain would be the presidential candidate who could better fix the crisis (24% are more confident in Senator Barack Obama). Advisers have been supporting the Republican candidate since the beginning of the election, according to the Barometer.

The Brinker Barometer survey was conducted online in September and had 370 respondents.

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