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September 1, 2021

Reviewing the company’s approach to customers with marijuana-related businesses was one of the first Merrill Lynch Wealth Management executives addressed as part of their Project Thunder initiative. The campaign launched last week aims to address frustrations and pain points that the brokerage house’s financial advisors have endured.

Merrill executives unveiled plans to “streamline” and “flex” the onboarding process for customers who own or invest in marijuana companies as part of the new initiative, according to internal news posted by executives on Wednesday sent to the consultants.

Advisors can now get divisional-level approval for clients with marijuana-related businesses in “lower risk situations,” the message said, meaning they no longer need to get the blessings of a New York-based executive in those instances . The policy change gives flexibility to customers who have a small portion of their total net worth associated with marijuana businesses, the company said.

A Merrill spokesperson confirmed the internal message, which included two more “wins” from Project Thunder: plans for local recognition events in 2022 and more than “50 million views” of the Merrill brand in National Football League stadiums as of this month, digital platforms and other places.

The spokesman did not provide any further details about the announced changes by the editorial deadline.

“Through these efforts, we have started rolling out dozens of improvements in key areas, including making business easier; Product and platform improvements; Success and culture; and to celebrate Merrill and all it represents through increased visibility, “Merrill President Andy Sieg said in an email statement when Project Thunder was unveiled last week.

According to Alma Angotti, a partner at compliance consultancy Guidehouse, onboarding clients with marijuana-related businesses and investments has remained a sticking point for many brokerage firms as the state and federal government began regulating the use and sale of recreational marijuana are inconsistent.

Although some states, including California, have legalized adult recreational marijuana use, a state ban remains in place, so brokers have placed restrictions on potential clients investing in the industry from handling assets based on the income from one Protect offense, she said.

“Any revenue related to the sale of marijuana is technically the proceeds of federal crime, which means it can be forfeited, confiscated and you could be accused of money laundering,” Angotti said.

The federal government has not consistently followed policies that broadly define revenues related to the sale of marijuana, Angotti said, because the Obama administration said it had no plans to enforce a broad definition of marijuana-related businesses or because of banks or brokerage firms To prosecute “laundry”. their funds, but then the Trump administration declared a reversal.

Without more clarity on the part of the federal government, the regulatory obligations of the brokers would be difficult to recognize, said Angotti. Will customers “fund a mall that rents to a marijuana dispensary or makes insurance payments for marijuana stores,” she said, and will those be governed by federal laws that make the proceeds illegal?

While the answers are not clear, prior to the announcement of their new policy, Merrill executives may have determined that they have sufficient experience to make more rational judgments based on the types of prospects and businesses that consultants have recently brought on board said Angotti.

Merrill executives unveiled Project Thunder on August 25th and announced to consultants that they would roll out 24 changes in eight weeks based on their feedback. The first changes announced include allowing some trainees to join teams directly, changes to the 24-hour trading rule, and the inclusion of alternative investments in a personal wealth analysis tool.

“I’d say all the best, but not monumentally,” wrote a senior Merrill consultant in Florida, who asked not to be named in response to the changes announced this week.

One recruiter, who previously worked at Merrill and also refused to be named, described the company’s marijuana policy change as “something that must be a big deal to a few, but only a few.”

More consultants tired of the remote world created by Covid-19 will be more likely to welcome the broker company’s plan to hold local recognition events in 2022, the recruiter said.

Merrill put a damper on some consultant parties last year when it slammed the door on a long-standing industry tradition of allowing mutual fund, annuity, and other product sellers to provide their brokers and clients with gifts, entertainment, or finance for business meetings. According to an internal memo, the company also wanted to avoid “the perception of a conflict of interest” in its interactions with third parties.

While Project Thunder is underway, Merrill brokers are encouraged to provide feedback through advisory boards to management, industry and market leaders, and peer networking groups.

The campaign kicked off less than two months after Sieg confirmed in an internal presentation that management was focused on churn, which rose from 4% in the second quarter to as much as 5%. (Executives at competing Wirehouse Morgan Stanley reported a turnover rate of less than 2%.)

The total number of advisors to Bank of America, including several thousand bank-based edge advisors and private bankers in addition to Merrill’s core strength, declined 5.9% year over year to 19,358.

Mason Braswell contributed to this story.