When John Thain took the helm at Merrill Lynch, there was a lot of speculation about what direction he might take the fabled brokerage house. It seemed unlikely that the former Goldman Sachs executive continue Stan O’Neal’s drive to remake Merrill in the image of Goldman. That hadn’t worked out so well. Yesterday the Financial Times reported that Thain is aiming to pump up the importance of the global private client unit.
[O'Neal] also worked hard to de-emphasise Merrill’s private client group – the public face of the bank for years. He demoted Bob McCann, president of that division, so that he didn’t report directly to Mr O’Neal, and refused to put senior retail officials to the executive board.
Now, insiders at Merrill say, Mr Thain plans to elevate the importance of the global private-client unit again. This can only be a good thing given that the bank paid 24 times forecast 2007 earnings and 3.4 times current book value in January 2007 to acquire private bank First Republic specifically to expand its high net worth business.
Thain reverses ‘Goldmanising’ [Financial Times]