Bank of America (NYSE: BAC)’s Krawcheck Planning Management Changes for Brokerage Business

Salle Krawcheck, President of Bank of America (NYSE: BAC)’s wealth management division continues to search for a head of the firms brokerage business. The 15,500 person operation remains one of the largest in the industry, and the candidate pool is rather sparse. Two people with knowledge of the process state that Andrew Sieg and John Thiel appear to be the front runners for the position.


Sieg runs the Retirement Services Business for the firm, while Thiel is responsible for the Private Bank, catering to high net worth individuals.  The executives are among about four candidates vying to replace Lyle LaMothe, 49, according to the people, who asked for anonymity because the search is private.


Krawcheck is on the job for almost two years now, having joined the firm from Citigroup (NYSE: C) in August of 2009. The bank purchased Merrill Lynch & Co. earlier that year, triggering concern that some of the biggest producers might defect amid a culture clash. To combat the myriad of culture issues that have emerged since the acquisition was completed, choosing an internal hire may help bolster confidence. Howard Diamond, chief operating officer of Diamond Consultants LLC, a Chester, New Jersey-based executive-search firm commented “To pick someone who they can say has been more in the trenches at Merrill Lynch is a smart move. If Bank of America does the little things and acknowledges the Merrill history, that goes a long way in an adviser’s mind.”


Though Sieg and Thiele are said to have the inside track, the division’s regional heads may have a fighting change as well. William Lorenz, director of the U.S. Southeast area of brokers and Donald Plaus who runs the Northeast and both report to LaMothe may be considered for the job.Susan Thomson, a spokeswoman for the bank commented “We’re fortunate to have a deep bench of talented senior managers in the organization to consider for this important role and we’re being thoughtful and diligent in the process.”


The brokerage is the biggest single contributor to Krawcheck’s business, with almost 80 percent of the division’s $16.7 billion in 2010 revenue coming from the adviser group. The unit posted a 4 percent increase in revenue last year to $13.1 billion, or about $854,000 per adviser. As Bank of America’s commercial banking business continues to struggle with increased regulatory requirements, the brokerage business will become increasingly important to the firm’s long run growth. Krawcheck told investors this month that her long-term target for revenue growth in the wealth-management division is 6 percent to 7 percent per year, and Chief Executive Brian Moynihan agrees the former Merrill division will be key to firm growth.