Brokerages, such as Bank of America Merrill Lynch (NYSE: BAC) and Morgan Stanley Smith Barney (NYSE: MS) which also offer retail banking services have been working hard to promote banking and lending services to their clients in an effort to generate new revenue.
Morgan Stanley (NYSE: MS) Smith Barney has hired more than 100 new bankers in recent months to offer lending and mortgage services to the unit’s wealth management clients. Morgan Stanley (NYSE: MS) Spokesman Jim Wiggins said on Thursday that the company may increase this number to as high as 500 by the end of 2011. Morgan Stanley also plans to start making loans during the third quarter to clients that own small businesses.
Bank of America Corp (NYSE: BAC)’s Merrill Lynch division has been aggressive in getting advisers to refer clients to Bank of America Corp (NYSE: BAC) for mortgages and other loans. Last Tuesday, Merrill Lynch management offered advisers an additional incentive to cross-sell Bank of America Corp (NYSE: BAC) products to customers, according to a recent report from ABC News citing an anonymous source.
According to the report, “An annual bonus that rewards advisers for bringing in new accounts with more than $250,000 of assets will now be expanded to include bonuses for selling Bank of America products. Advisers could earn an extra $40,000 to $50,000”
“When the markets are up, everyone is making money and the focus is on increasing the number of clients and assets,” said Scott Smith of Boston-based consultant Cerulli Associates to ABC News. Now “the focus is on increasing the profitability of every relationship.”
