Merill Lynch

About Merrill Lynch: The wealth management division of Bank of America is currently known as Merrill Lynch. 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. In Brief: In this particular case study we find that Merrill Lynch has introduced a new client relationship technique called the Supernova at the Merrill Lynch’s Indianapolis offices. This practise was implemented on a trial basis and generated a positive and vibrant response between the financial advisors (FA’s) and their customers. But on the flipside it was continuously challenging the traditional ways of dealing of a relationship by a FA with its client party. The concerned person here in this case is in a dilemma whether to apply Supernova in Merrill Lynch with a larger perspective. SUPERNOVA

Supernova was the name given to new way of relationship managementintroduced by Merrill Lynch’s Indianapolis offices. Supernova was invented by Rob Knapp, head of Mid West Dist office who’s “Customer Satisfaction” ranked last among 32 dist in country in 1995. The Supernova Model is a client service, client acquisition, and practice management model that drives an explosive acceleration in revenue and client satisfaction by capitalizing upon the 80/20 Rule. It was first implemented by financial advisors at Merrill Lynch under the leadership of FA Rob Knapp. Thereafter it became more popular in the finance industry. The advisor implementing Supernova can prove the benefit of this model while creating a better experience for your clients and significantly growing your business at the same time. Supernova was required at Merrill Lynch since the Financial Advisors hardly contacted their clients through any medium to solve their problems or offer them new financial products. This leads to dissatisfaction amongst the clients and result into a high turnover rate.

PROBLEMS BEFORE SUPERNOVA :

Large client base i.e. 550 clients per Financial Advisor .Thus it was difficult to contact each and every client by an Financial Advisor. Secondly all the meetings and follow ups were not structured in a proper manner leading to shortage of time and non-delivery of information from one end to the other.

ADOPTING OF SUPERNOVA
The main idea of increasing awareness about Supernova was through road shows which were organised by the Supernova users themselves. They wanted other others to adopt Supernova by knowing what the program had done for them, their client associates and their clients. The strategic initiative of supernova had been spread though there were road-show presentations made by the supernova users for those who were eager to know what the program had done for them, their client associates and their clients. The two main points that Knapp often used in order to “sell” Supernova were: First, he described it as “The Ultimate Client Experience” Second, he described it as “Plan, Process and Discipline,” meaning that you are going in a very systematic manner from chaos to plan, process and discipline- which will give the FAs the control over their time.

IMPLEMENTATION OF SUPERNOVA:

CHALLENGES:
Economic backdrop:
In 2003 Merrill Lynch was facing a very hard time as the recession had hit the market. Few viewed this time as an opportunity to bring change in the organization and few saw it as a real test as the company’s earnings were getting questionable Politics and Recognition:

Supernova had received a mixed reaction from its employees. Some were positive towards it and some did not believe in it.Hence they had to internally market Supernova to its employees to create positivity and get the best result. Organizational Leverage Point:

Another drawback that was seen in implementing supernova was that, there was no transparency in the mind of the FAs whether the solutions given to them by their managers were beneficial to the managers themselves or to the FAs. The FAs in Merrill Lynch were divided into 3 groups

20% of the FAs were in favour of Supernova and adopt it quickly as possible 20% were unlikely to adopt it Rest 60% who weren’t aware of it needed to be coached about Supernova which was time consuming. Follow up/support Some of the risks involved were that they risked their relation with the clients as the clients were not satisfied with them .Secondly, Supernova believed that in order to enjoy full benefits and improved quality of life-one should fully adopt the process. Expectation of clients

Supernova was able to achieve customer satisfaction by keeping them happy. With Supernova they created a customer pyramid as those who adopted supernova were more satisfied than those who didn’t. Customer satisfaction level rose as their complaints were immediately taken into account. Changing Roles of some FA’s

FAs were different in their approach towards client. Traditional FAs recommended investment whereas the new FA’s focused on providing consultative services, examining risks to rewards as opposed to selling a product. Misapprehension

There was a knowledge gap as the people were not completely aware of the products , services and benefits that supernova provided Nature of financial advisor One of the most important challenges in implementing Supernova was that the FAs enjoy their personal space and also value their independence. If they have to adhere to some lock step, it tends to go against the interest of the FAs.

Result
Launch of supernova created a revolution for Merrill Lynch.
The model Supernova-Merrill Lynch which is a client service model, marketed it services though a new concept of customer satisfaction and “The Ultimate Client Experience “ . Concept of customer satisfaction totally turned Merrill Lynch into a customer oriented organization. Their main focus was to concentrate on top 100 clients and get profit from them. Supernova uses the concept of 80/20 (80 percent of the profit comes from 20 percent of the clients) The company was able to retain their customers through “Supernova” model as the customers were highly satisfied with the company. Thus, happy customers are easy to be retained in the organization.

“Supernova” – The Company was able to establish “Service recovery” as the customer complaints were not addressed very quickly. As we have learnt that the FA’s were now giving consultation services. Their focus was on improving service than on selling the product.

Supernova also helped in brand positioning of Merrill Lynch. FA maintains customer needs through ‘Updated system folder management’. Thus, they would call the clients and propose various methods to improve their portfolio to get better returns. Thus, Supernova was a total customer driven business process that helped company changing its value systems from simply selling and maintaining “books” to retaining and consultation services.

CONCLUSION
This case revolves around creation of Supernova which leads to customer experience. It provided objectives to financial advisors for gathering more clientele. “Supernova” is totally customer focused business process. It has not only brought Merrill Lynch to new level of success but also moved the organization’s value system from selling of a product to consultation services. The company was able to move from Adequate service expectation to Desired service expectation and thus “Supernova” helped Merrill Lynch climb the new ladder of success. This concept was a success at Merrill Lynch due to its new approach for handling clients and advisors at the same time.