How Merrill Lynch Wealth Management is reinventing advisory preparation
In a bold bid to boost performance, Merrill Lynch Wealth Management has re-engineered its iconic training program—adding a national curriculum, compensated mentors and, even, “breathing breaks.” The move is likely to be watched closely by industry insiders. As recruiter Rick Peterson, who heads Houston-based Rick Peterson & Associates, frames it:
“I’m not sure any training program has been judged to be good, not when historically only two out of 13 trainees make it in this industry after five years. Any new approach is better than anything that’s been tried in the past. The fact of the matter is we desperately need new financial advisors.”
The changes in Merrill’s training program aren’t tweaks but wholesale revisions that started in 2011 as part of the firm’s ongoing mission to create what Dwight Mathis, chief of new advisor strategy, calls “the Ivy League of financial advisor training.”
What is the difference between today’s training program and the one Mathis himself graduated from in 1998? A lot. Traditionally, Merrill trainees have undergone a six-week development program at national headquarters followed by two years of salaried training at a branch elsewhere in the country. The result: a high degree of variability in success rates.
“When I first took this job, I looked around at all of our complexes to assess results. You quickly see that some complexes had graduation rates greater than 50% year in, year out while others were well below the national average,” Mathis says. “Variability is quality’s enemy. We had 120 complexes with 120 different methods of delivering training.”
As a result, Merrill two years ago hired an executive for each of its 11 geographic markets to head what it officially calls its Practice Management Development, or PMD, training program. There are also PMD coordinators in each of the 120 complexes whose job is to deliver the national program locally. Notably, the two-year training program has gone by the wayside. It is now 43 months long.
In the past, Merrill placed an emphasis on hiring people with sales experience. No longer. “Often sales experience does not correlate to future sales success,” observes Mathis. “Often when they were looking for work, it was because they weren’t very good at sales.”
Instead, the firm is reaching out to “high achievers” such as decorated military veterans, athletes, successful attorneys and accountants, and college students at the top of their class. And, for the first time, Merrill has made the certified financial planner designation a requirement of the curriculum.
Matthew Cross, The Health & Wealth Champion
“PMD Passport is a year-long deep development program that helps third year PMD FAs master strategic intent, mental awareness and nutritional alignment,” says Mathis. “We believe that the skills developed in this program are the passport to a productive and sustainable career as a financial advisor.
Cross amplifies: “These are the most invested advisors. It takes a tremendous amount of energy and focus to get to this point. Now they are making that leap to a new frontier. They are at a very vulnerable point but a huge opportunity point. This supports them strategically and tactically. It gives them extra confidence and another way to connect the dots.”
What do breathing breaks, correct posture, hydration, exercise and a spoonful of cod liver oil a day have to do with creating a successful financial advisor? Everything, according to Matthew Cross, who designed the new third-year curriculum to help the trainee make the transition to full-fl edged advisor.
“Everyone is a wealth champion but they must first be a health champion,” says Cross, president of Leadership Alliance, a consulting firm in Stamford, Conn. “What we do is help advisors define key levers of success and key barriers that might trip them up. In many cases, it’s health. If you’re healthier, you are happier, and the odds of you being a long-term committed member of an organization go through the roof.”
The curriculum, based on the Japanese Hoshin Kanri strategic priority alignment process, helps the trainee prioritize. “They get very clear on the right things to do in the right order at the right time,” Cross says. One key concept of the training is the “First 15%” rule, which says that 85% of the results you will enjoy in a day lie in the first 15% of that process.
The central component of the third year of training, called the PMD Passport program, comes with a “peak performance” passport that advisors use to track their progress and happiness.
Corey Rewis, The Learning Expert
“You have to overcome previous experience, good or negative.”
The firm has also identified three “derailers” it doesn’t want: difficulty coping with rejection, a shaky work ethic and poor appetite for risk. With new content still being added this year, it’s too early to give the overhauled program a grade. But preliminary results are promising. Last year, an unprecedented 68% of advisor trainees hit their production goals, resulting in record high revenue.
“What we’re trying to build is the most professional, client-focused sales and investment training program in the industry. If you’re part of that program, it’s going to be hard. We don’t apologize for the standards,” says Mathis.
“Still, we have a responsibility to these PMDers when we hire them to help them grow and graduate. One of the things that disturb me in this industry is when you hear people talk about throwing new hires against the wall and seeing if they stick. If someone is not successful, I feel it’s our fault as an organization.
We have to build a structure and process that is so good the outcome is much more predictable.” Adults learn differently than children, a factor that Corey Rewis, head of PMD learning and development, has incorporated into the new curriculum.
“Kids will learn something because they don’t know not to. Adults distill what they learn through previous experience,” he says. “When you teach introductory sales training, they’ll say ‘I’ve been through training like this before and it didn’t help.’ You have to overcome previous experience, good or negative.”
Timing—the point at which a concept is introduced—is also key to adult learning. Two years ago, the PMD program launched what was expected to be a first-rate sales training initiative. It was a bust.
“Every single trainee said ‘I don’t need this.’ Motivation to engage was very low. Three months later, when we placed it in a training cycle after they had had the opportunity to do some sales, they were now saying ‘Help me.’ Adults always have to know how what they are going to learn will benefit them,” notes Rewis. “At the end of the day, they retain some piece of information because of how you structure it.”
Merrill has also added customized “learning paths.” As an example, a trainee with some advisory experience receives targeted material about licensing that differs from that directed to a trainee with no investment experience.
And, in a nod to “less is more,” the training program dramatically reduced the amount of content it delivers from over 500 discrete activities to 275. “We’re constantly refining,” Rewis adds. “It’s the Disney approach. It’s always a case of better than yesterday but not as good as tomorrow.”
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