Merrill Lynch director sharpens her game plan

© St. Petersburg Times
published January 26, 2003

As director of Merrill Lynch's Tampa Bay area operations for a little more than a year, Linda Marcelli deals with the local fallout from Wall Street's storms. Last year's big blows included the company's formal apology and a $100-million payout to settle charges of misleading investors in its research reports. Some analysts were privately disparaging stocks they were recommending to investors.

Marcelli, who joined Merrill Lynch 28 years ago, was among the first women in the company to be given a management role. Her previous assignments include district director for New York City operations. She is now responsible for Merrill's Tampa, St. Petersburg, Clearwater, Countryside and Crystal River offices, which employ about 160 people, including 120 brokers.

She talked with the St. Petersburg Times last week about her job and about Merrill Lynch's approach to building its business in the Tampa Bay area. Here is an edited version of that conversation:

Q. How much of the brokerage business does Merrill Lynch have in this market?

It's about 35 to 36 percent of the market and growing.

Q. Whom do you see as your biggest competitors in this market?

The banks. Northern Trust. To some degree Smith Barney. That's about it.

Q. What is the firm's emphasis for the Tampa Bay market?

Our whole concept is needs-based investing and financial planning. You may have seen some new ads about the wealth-management process. They're calling it "Total Merrill."

Merrill many years ago invested in an infrastructure to get away from being just a stock brokerage business. We have our own trust company. We have our own bank. We have our own mortgage company. In addition to investments, the concept is to be a total part of our clients' lives and to be able to service them in all the areas that they need financially.

One of the new emphases is business financial services. We are interested in business owners with revenues from $3-million to $100-million. We do business lending, and we're very competitive on lines of credit, equipment leasing. We have cash management, a wealth of retirement plans and services.

Q. Are you trying to narrow your market, getting rid of the smaller client?

We're trying to segment our account holders. We believe that clients deserve to be treated according to their needs. We have a service facility in Princeton and one in Jacksonville to service these smaller, up to $100,000, accounts. They're open 24/7. They're wonderfully well-trained and courteous. There are people who would prefer that service, and in many cases it's better for them if they only need a limited number of contacts a year and if they have a limited amount of money.

Q. So if you have a smaller account, you call an 800 number instead of talking to a broker in your local office?

You might. It would be your choice, and it would be your adviser's choice. It's the broker that chooses that.

In order to truly give a client service, we know that we need to be talking with our clients at least once a month. We know that we need to be doing four portfolio reviews a year, and we know that two of those need to be in person.

The clients need to be in a wealth-management process. We're not just selling stock any more. It has to start with a real evaluation of their needs and goals and their risk assessment. That's one or two meetings so that you really understand what your clients need.

Then we go to a financial plan, then the analysis of it. How do we structure a portfolio? How do we make it work so that it's right for the client in terms of risk but also gets them to the point in their life where they need to be?

Q. Is it too expensive to provide all that to clients with smaller accounts?

They don't need it, usually.

It's money and it's time. It takes a lot of work to get it organized. Then the investments are made, and they have to be monitored. We've added up the hours. An adviser usually can service up to 200 people properly, doing it in the way I've talked about.

Q. What kind of impact have you had from the settlement with the New York attorney general over Merrill Lynch research? How has that affected you?

It's been challenging and difficult. In the beginning, the shock of it and the accusations were very, very, very hard. What was really hard for us is that we were not able to answer them. Only one side of the story truly has been told, but you can't fight that kind of stuff in the press.

It meant going back and meeting with clients on a one-on-one basis and trying to help them understand what had happened, that there was another side of the story and that we were sorry for anything that had happened that had been negative for them. We got a lot of calls.

Q. Did you lose clients because of this?

Yes. That's why I met them and talked with as many as I could. I think we prevented some losses, but yes, we had people leave. That was very personal for our advisers. They're really developing their skills and are top-flight professionals. To go through a market like this and to go through all the negative publicity has been hard.

We've always stood for the best in the business. We've always stood for the high level of integrity. On the other hand, there were practices in the industry that I think were unhealthy, and I think those things will be changed and are being changed now. I think that's very positive.

Q. How do your clients perceive the value of Merrill Lynch research after this? Is there greater mistrust or a feeling that problems have been corrected and everything's fine now?

I think it will take some time to earn that trust back. Most of our advisers in recommending a stock over the last three or four years have always used other firms' research as well. They've always said, "Here's a Merrill Lynch opinion. Here's what such-and-such thinks, and here's what so-and-so thinks."

The difference is whether you provide a real value to your clients. That's what you saw in some of the meetings that I had with clients. Many were upset and angry at the accusations that had been made against the firm and distressed about everything that was happening on Wall Street.

But if I could take them back to their relationship with their adviser and how had that been, it almost always came back to, "I trust my adviser. He or she has taken care of my family and me for years. He's kept me from making some dumb decisions, has stopped me from buying some things that I shouldn't have bought, has gotten me to do my estate plan, has gotten me to put my life in order." When we go back to that, it refreshed the clients' memory of all the things that we had done.

Q. What's the goal for Merrill Lynch in this area 10 years from now?

The goal is to be recognized as the best provider of wealth management for high net worth individuals in the Tampa Bay area, to have clients who are delighted with our service and who feel that we have added significant value to their lives and their family. I hope it doesn't take 10 years. I would be very happy with three. We can grow the business a lot more. We're just starting with business financial services, and that is a huge market. This is the largest growth market in Florida for million-dollar households. This is a great opportunity.

Q. Aren't these business people the banks' customers?

They have lending relationships and cash management relationships. Often the person who has been their relationship manager has been their lender. Then when they have assets that need management, they get turned over to someone who may or may not have a lot of experience in that area.

We are hiring people who have been commercial bankers who are very well established in the community who want to leave banking because they find that they can only do a portion of the business.

Q. You're hiring lenders and training them to be brokers?

Yes. We have a separate training program for them. Among the five offices, we're probably talking about (hiring) eight or nine people. We also do some hiring of people who have been accountants or attorneys or who have had other professional affiliations and business experience and success.

Q. How did you get involved in the brokerage business?

My husband and I lived in Boston. We had a school for women, a career school -- fashion merchandising and that kind of thing -- and we reached an inflection point where we either had to become very commercial, make it larger and make money with it, or close it. We closed it. We worked for a while with foster children. It was actually my husband who suggested that I might want to think about this. I had invested our small stock account, and I'd always loved it. I interviewed with three firms and chose Merrill Lynch. I had always liked the way I was treated as a client.

Q. How did you move into management?

I had been interested in management and leadership in my office in Boston. After the first year, I started working with other young people, helping train and develop them. I became the equity sales manager, the municipal bond sales manager. I liked helping people make a difference in how they did their business, how they ran their lives. The firm asked me to go to through its assessment center. That's Merrill's way of selecting future managers.

Q. Somehow you ended up commuting between St. Petersburg and New York. How did that happen?

We had family here, and my husband, Tony, and I moved down from Boston. Then Merrill offered me this great job in New York City. My husband was very supportive. The first job turned into a second job, then to a third job. We got an apartment in New York, and I went back and forth for about 20 years.

I very much missed my family, and it was very hard for me. One day in the middle of winter, my husband and my sister, Lucky, drove a tractor trailer full of Florida vine-ripened tomatoes into New York City and went around to restaurant owners to sell them. That was the start of Lucky's Sunrise Sun-Ripened Tomatoes. Now they handle most of the fine restaurants in the city. Tomatoes are picked down here when they're just about ripe. They're trucked overnight, 24 hours in our tractor-trailer.

Q. Did you help sell tomatoes?

When we first started, I would help the family on weekends. Maybe my second week, I was on the back of a delivery truck on a Saturday morning. I threw open the back of the truck, and there were two of my advisers standing on the sidewalk on Amsterdam Avenue. They could not believe it. I've had a lot of fun with the business. I know all the good restaurants in New York. Now my sister and one of my sons run the business. I just advise them.

Q. Eventually the commuting got old and you left New York?

I told them I needed to leave. The firm was just wonderful. They put an office in my home down here, and I became a consultant. They called a little over a year ago and said, "Would you think about coming back?" They've been so good to me and, of course, I missed it. I went to my husband and said, "You won't believe this phone call I got."

Q. You mentioned you are going to the Super Bowl. Have you been a Bucs season ticket holder a long time?

I think we've held season tickets for the last six or seven years. We also have season tickets for the Lightning and for the Devil Rays. I love sports. The thing I like most is all the examples of leadership, the commitment to excellence. You see a coach help players get better and make a commitment to winning.

That's why I'm really excited about Lou Piniella. I think he's terrific. I had the good fortune to have lunch with him a couple of months ago, and this is a man who knows what he wants. I think he's like Gruden.

Q. Do you think Jon Gruden is the reason the Bucs are in the Super Bowl?

I think the pieces were in place and Gruden tightened it, shaped it, got it organized, focused and helped them believe in themselves.

I found the game last Sunday fascinating. They were in cold weather. They never win in cold weather. Philadelphia always beat them up. They had all these reasons for not winning, and they go out on the field and the first time Philadelphia has the ball -- bang.

But the key was Gruden on the sidelines telling them, "Relax. Start over. It's not the end of the world. We've got a great plan, and we're going to execute our plan." And they did that. They had the talent and the skill and had done the hard work and the preparation. He kept them on track to win. I used that example in a meeting this morning.

Q. So you see a lot of parallels to business?

I sure do.

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