Merrill Lynch adviser exodus ends, buoys Bank of America earnings

Bank of America Corp. said Wednesday it lost $5.2 billion during the final three months of 2009 as consumers struggled to make mortgage and credit card payments and the bank repaid its government bailout money. But the Charlotte, N.C.-based bank, which was one of the hardest hit by the credit crisis and recession, said its results were boosted by strong results from its Merrill Lynch unit.

Certainly, the exodus of financial advisers from Merrill Lynch following the takeover by BofA seems to have slowed down during the second half of the year. Indeed, executives at BofA noted that, after losing 2,000 advisers in the first quarter, attrition pretty much stabilized in the fourth quarter,

The numbers tell the tale. The firm’s brokerage business has 15,006 financial advisers at the end of the year, down 11% from the roughly 18,000 it had at the start of last year. But that total is actually an increase from the third quarter, when BofA reported 14,979 advisers on staff. The fourth quarter number is also level with the second quarter, when the bank reported it had 15,008 advisers on board.

The numbers, which the company revealed in its earnings report today, confirm comments made by Sallie Krawcheck, president of Bank of America’s Global Wealth and Investment Management division, in a media call last week.

In that call, Ms. Krawcheck she said that attrition at Merrill Lynch in the fourth quarter of 2009 reached a record low. “We’ve seen some [attrition] but not as much as we would have expected,” Ms. Krawcheck said.

In fact, the addition of Merrill at the begining of 2009 — questioned by some at the time — buoyed BofA’s fourth quarter results.

Net revenue from Merrill was up 1.6% to $3.08 billion from the previous quarter. Total client brokerage assets rose 2.4% to $1.27 trillion from the third quarter.

Bank of America said Merrill’s global wealth and investment management saw its net income rise to $1.3 billion in the quarter, up from $515 million a year earlier. Profit rose 9.5% to $446 million from a year earlier. Earnings rose 43% from the third quarter, which had higher credit losses. Total client assets for Merrill’s global wealth management unit were $1.4 trillion for the end of the year, compared to $1.3 trillion at the end of the first quarter.

Overall, Bank of America $5.2 billion loss, which reflected the payment of preferred dividends to the U.S. government, compared with a loss of $2.4 billion a year earlier.

CEO Brian Moynihan has said Bank of America’s decision to pay back the government loans was a major step in bringing back employee and shareholder confidence. It also freed the bank from restrictions on how much it could pay employees.

For the full year, Bank of America lost $2.2 billion, or 29 cents per share. It earned $2.56 billion, or 54 cents per share in 2008.

[The Associated Press contributed to this report.]

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