Merrill Lynch: Culture change or just the latest innovation?

For all of my 26 years as a headhunter, Merrill Lynch has been the most stable wealth management firm in the industry, as well as the most significant innovator. On the stability front, let’s recognize that their name has not changed and recognize what that represents. Bank of America bought Merrill Lynch, albeit in a shotgun wedding with the government holding the shotgun, but kept the Merrill name. Though Merrill made some minor acquisitions over the years (for example, Advest/Lebenthal), they did nothing that would come close to changing their brand. Senior leadership was always promoted from within, often with careers that began as an Advisor.
Compare that to Morgan Stanley Smith Barney. If we include some of the mega-mergers behind that corporate name, it actually would look like: “Morgan Stanley Dean Witter Smith Barney Shearson Hutton (Lehman for a little while) Legg Mason”. If we go back further, many more would be added in.
Merrill’s strength has been partly this consistency of culture and also innovation: they brought financial planning into the wirehouses, invented the CMA, and scared many Advisors from leaving (pre Broker Protocol) by the aggressive use of the Temporary Restraining Order. More recently, Merrill Advisors tell me that they can now see the assets that their clients have at Bank of America with a separate tab on their desktop. This accomplished in one year what Citi/Smith Barney could not do in over ten.
As an industry historian, as well as an unabashed cynic, I’m fascinated with this type of merger and how it affects the cultures of both institutions over time. Sallie Krawcheck, an outsider who failed to effectively bridge the Citi-Smith Barney divide, and who was never an Advisor herself, is running Merrill Lynch within B of A. Over the last year, Merrill has capitalized on the turmoil within post-joint venture Morgan Stanley Smith Barney by hiring a talented group of their Branch Managers and one former Regional Director: Jimmy Tighe, Jason Weaver, Ken Ross, Peter Ardolino, and Michael Simonds. I’ve never seen Merrill so aggressive in bringing in outside management talent in such a short period of time.
While Merrill Advisors welcome the continued innovation, they also complain about increased bureaucracy within B of A, and an HR-centric culture that clashes with the entrepreneurialism of the typical Merrill practice. In the past, it has been rare for a large branch to be taken over by anyone other than a long time Merrill veteran who started as an Advisor within Merrill Lynch years before. Those recent recruits are not cheap and will not be sitting on the sidelines. They soon will be running complexes, branches, and down the road, regions.
So, is this the first wave of cracks in that famous closed culture? Or is this poaching of talent just the latest “innovation” to keep the organization fresh?