Merrill's 2027 Advisor Pay Plan Keeps the Grid Flat, Raises the Growth Award Bar and Adds a Lending Bonus

Merrill's 2027 advisor compensation plan keeps the core grid unchanged and moves the incentives into growth, banking and lending awards.

Merrill will leave its core payout grid alone in 2027. The changes it announced to financial advisors on Thursday, October 22, are all in the bonus layer above that grid: the bar to qualify for its Growth Award goes up, its top-tier premium award is rebuilt, and a new award pays advisors for arranging client loans. Barron's framed the plan as centered on lending, part of a long-running effort to get advisors to sell more of Bank of America's banking products.

In a statement reported by American Banker, Merrill COO Patricio Diaz said that the firm reviews pay annually to support its long-term strategy. He said this year's result was "a few targeted updates."

Merrill keeps the 12 basis point Growth Award rate on up to $50 million of what it calls strategic flows, which take in managed account assets, bank deposits and loans. Flows above $50 million earn a lower rate. Qualifying gets harder, though. Next year the minimum rises to $7.5 million of strategic flows (the current bar is $5 million), or alternatively four new household credits instead of three. Merrill usually gives one credit per new household and sometimes more for larger relationships. American Banker reported these thresholds.

The old Elite Award required more than $150 million in strategic flows. It is being replaced by three separate elite awards, each with its own route to qualify: $50 million or more in net managed account flows, $10 million or more in checking and savings balances, or $10 million or more in client lending. An advisor who qualifies gets a Growth Award payout 50% larger. These lower, category-specific bars should open the premium to producers who would never have reached the old $150 million hurdle.

The new Lending Growth Award pays 10 basis points on client loans totaling $10 million or more, doubling to 20 basis points once that total reaches $25 million, according to American Banker. Together with the lending route to an elite award, it gives advisors two separate ways to be paid for the same loan balances.

Merrill has been adjusting its pay plan around the edges for several years. For 2024 it dropped its unpopular growth grid, which penalized advisors who failed to add households and assets, and replaced it with the Growth Award, which pays up to 12 basis points. For 2026 it cut payouts on smaller households, meaning relationships of roughly $250,000 to $500,000 counting both assets and loans, to 20% of the revenue they generate, according to American Banker. The 2027 plan keeps that pattern of leaving the grid alone and moving the incentives.

Compensation consultant Andrew Tasnady, founder of Tasnady & Associates, told American Banker the changes are largely neutral. Advisors who are growing are likely to benefit, while flat producers will see little difference. "If you're flat, nothing's really changing," he said.

The timing lines up with Merrill's recruiting push. American Banker reported that Merrill Wealth Management's client balances rose 9% from a year earlier to $4.2 trillion in the third quarter. On the firm's earnings call, co-head Lindsay Hans said assets brought in through recruited advisors had more than doubled so far this year. A stable grid gives recruiters an easy line to pitch, and the lending awards reward advisors who move clients onto Bank of America's balance sheet.

Merrill is the third wirehouse to publish its 2027 plan, according to American Banker. Wells Fargo, the fourth, usually announces its plan in October.