Deals & People March 31, 2023

Merrill Wealth Management Head Sieg Departs for Citi

The wealth leader returns to his former employer to focus on driving more “fee-based revenue.”

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Andy Sieg, president of Merrill Wealth Management and a member of Bank of America’s senior leadership team, is leaving the firm to head Citigroup Inc.’s wealth division, the firms announced Thursday.

The wealth management head, who was with Merrill for about six years, will be returning to Citi, where he was a managing director in its global wealth management division until 2009. He left to join what was then known as Merrill Lynch as head of global wealth and retirement solutions and took the role of wealth management head from John Thiel in 2017.

“This is a fantastic opportunity to build a leading wealth management business at the world’s most global bank at a time of massive wealth creation worldwide,” Sieg said in a statement. “There is a transformation underway at Citi, and I am excited about becoming part of a team that’s driven to deliver for clients, colleagues and shareholders.”

Sieg will take a six-month leave before starting the role, as per terms of his Bank of America contract, according to Citi. Jim O’Donnell will continue as Citi’s head of global wealth management until Sieg starts in September.

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Once he takes up his new post in the fall, Sieg will report to Citi CEO Jane Fraser, according to a letter sent to Citi employees. Fraser became CEO in 2021, taking the role from Michael Corbat after serving as president and head of global consumer banking.

“Andy’s decision to join Citi sends a strong signal about the potential of our Wealth proposition and the attractiveness of our unique global offering,” Fraser wrote in the letter. “Growing Wealth is a core pillar of our strategy and will improve our business mix by adding more fee-based revenue and drive improved returns.”

Bank of America announced that Lindsay Hans and Eric Schimpf have been appointed presidents and co-heads of Merrill Wealth Management, reporting to Bank of America Chair and CEO Brian Moynihan. Hans and Schimpf will join Bank of America’s executive management team and oversee more than 25,000 Merrill employees and client balances of about $2.8 trillion.

Hans joined Bank of America in 2014 and was head of Merrill’s private wealth management, international and institutional business. Schimpf began his career as a Merrill financial adviser in 1994 and was most recently division executive for the Pacific Coast.

The move marks the second time Sieg will leave Merrill for Citi, which he did in 2005 after a 12-year stint at the investment firm as a managing director. That move came before the New York-based wealth management firm was acquired by Bank of America in 2008 during the financial crisis. Before his first stint at Merrill, Sieg had served as an economic and domestic policy aide in the administration of President George H. W. Bush.

Merrill Wealth management reported client balances of $2.8 billion in its fourth-quarter 2022 earnings, with $1.1 trillion in assets under management. The wealth management arm also reported adding 8,500 new households, up 27% in the quarter for its best Q4 results ever.

Citi’s global wealth management arm reported a drop in revenue of 6% to $1.7 billion in Q4 2022, citing investment product revenue headwinds, which the firm said were offset by net interest income growth from higher interest rates.

Compliance March 30, 2023

AARP, US Chamber Comment on IRS Proposal on Remote Notarization

Thursday was the final day to submit comments on the December 2022 IRS proposal to allow remote notarization for many retirement plan changes and actions.

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Industry groups raised questions about and expressed support for an IRS proposal that would allow retirement plan participants to notarize certain procedures electronically, rather than in-person. This would make permanent rules introduced during the pandemic.

The IRS proposal was published in December 2022, and today was the last day to submit comments.

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The AARP has expressed concern, however, about spousal consent. They note that when a pension plan participant dies, their surviving spouse might be eligible for a qualified lifetime survivor benefit. Opting for this benefit can reduce the regular benefits the participant receives, so some participants may opt out. This opting out requires the spouse’s consent, which must be witnessed by a notary and a plan representative.

Given the high stakes of waiving such a benefit, the AARP believes this process should “require maximum safeguards against misunderstanding, outright deception, coercion, or other improper behavior,” which would be better served in person, rather than remotely.

The U.S. Chamber of Commerce expressed support for the proposal, but also stated concern about one element which would require plans to record and retain witnessings that require a plan representative. Specifically, they are concerned this requirement could force plans to violate state recording laws.

Likewise, the ERISA Industry Committee expressed the same support and concern as the Chamber of Commerce. They said, “We do have some concern that this new recording requirement will raise complications for plan representatives under state laws. For example, states have varying laws regarding whether one or both parties are required to consent to recordings.”

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