Merrill Lynch Case Summary

About the company
Merrill lynch is one of the world’s leading wealth management and financial advisory companies, providing financial and investment banking services. It comprises of 15,000 financial advisors and $2.2 trillion in client assets; it is the world 's largest brokerage. Earlier the firm was publicly owned and traded on the New York Stock Exchange under the ticker symbol MER.

About the case:
Merrill lynch has introduced a new client relationship technique known as “SUPERNOVA “at the Merrill lynch Indianapolis office. Supernova represents a major change in philosophy and approach to managing accounts focused on relationship and long term profitability rather than acquisition and immediate revenues. Father of supernova was Rob Knapp,

One of the biggest organizational problems was more delegation of routine calls and administrative tasks to client associates. Hence to ease the work out supernova client associates prepared FA’s “daily folders”. Each folder contained a client’s recent financial plans, amendments to it, and information etc. which he believed was prior importance to the relationship.
Monthly calls are scheduled by the client associates (CA), resulting in fewer interruptions and allowing FA’s to focus on important issues with clients in a more organized way. Also they induced “folder guilt “.

Acquisition
In acquisition, supernova FA’s would focus on acquiring some new, high quality clients or the clients which have been handed over to financial advisory center. Time dedicated for acquisition is 2-4 hours each day, which the FA’s found more than adequate. Many FA’s found that referrals were their best source of new business through their existing clients. Hard to focus on acquisition many a times within the supernova model.

Benefits of supernova
• Greater levels of client retention and client

 Team approach.
 Focus on relationships to build profits over time.

Value proposition for customers.
Multi generation financial plan in place
Process and total customer solution
Ideal customer experience
Rapid response to any problem

3. What changes were required to implement the Supernova process—for FAs? For Merrill Lynch itself? What were the risks and potential benefits for both?

Major change in philosophy and approach on managing accounts of clients, where financial advisor will merely be focusing on long term relationship and profitability rather than acquisition and immediate return.

For Merrill lynch change is nature of work, where customer retention and loyalty will be given importance and also resulting in less market errors due to decrease in number of clients and focusing on profitable clients.

Risk involved:
Some traditional metrics may not align with the supernova
Result in less focus on acquisition “golf problem “

4. Paint a picture of a Financial Advisor’s day using the Supernova process. How is this different from typical day under the old process?

Financial advisor using the supernova process:
 Organization and process driven
 Focus on ideal customer