(Bloomberg) -- Bank of America Corp. doubled the number of internal referrals that advisers in its Merrill Lynch wealth-management unit must make to avoid having their compensation cut.
The brokers must refer at least two clients annually for banking services in other parts of the company starting in 2017, up from one, said Susan McCabe, a spokeswoman for the Charlotte, North Carolina-based lender. Advisers will receive credit for the referrals whether they produce new business or not, she said.
Global banks have been seeking to generate more revenue from affluent clients as low interest rates and increased regulation crimp earnings. Chief Executive Officer Brian Moynihan said last year that Bank of America's wealth-management division -- which includes the Merrill Lynch and U.S. Trust advisory businesses -- is only “scratching the surface” of its potential to generate referrals within the bank.
Merrill Lynch brokers who produce less than $350,000 of fees and commissions and fail to meet the new requirement will lose 1 percent of their take-home pay, while higher-level brokers will see a similar cut to deferred compensation, according to AdvisorHub, a trade publication that reported on the plan Tuesday.
Morgan Stanley also announced changes to its broker-compensation plan this week, increasing the gross revenue brokers must generate in order to keep a higher bonus, a person with knowledge of the matter said Monday.
Bank of America's wealth-management profit rose 10 percent to $2.1 billion in the first nine months of 2016 compared with the same period a year earlier, according to regulatory filings.
--With assistance from Hugh Son To contact the reporter on this story: Laura J. Keller in New York at lkeller22@bloomberg.net. To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net, Steven Crabill, Nick Baker
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