Getting a big wealth management M&A deal to work, rather than lead to marital strife, is a tricky task. How has Julius Baer managed to make things work with Merrill?

One of the biggest wealth management merger and acquisition deals of recent years is Julius Baer’s purchase of Merrill Lynch’s international wealth management business outside the US. It is a move that has propelled Switzerland’s third largest bank up the private banking league. Results for 2013 (see here) have been positive.

Julius Baer is about half way through the process of integrating the Merrill Lynch IWM business; and practitioners in this industry will be looking with a beady eye for how well this process goes.

After all, it is an oft-spoken point from number crunchers that most M&A deals destroy more shareholder value than they create. There are also some fiendishly tricky technology and compliance issues to get right.  (As for the price, Julius Baer pays 1.2 per cent of AuM transferred.) And firms such as research/consultancy findaWEALTHMANAGER.com have pointed out how deals can alarm clients if not handled properly. (See here.)

Given all this, a decision that Julius Baer had to take was how quickly to execute the transfer of managers and clients, and how to reduce the risk of old Merrill Lynch RMs preferring to go their own way, taking books of business with them. After all, the idea of an American house marrying into a Swiss one is full of ironies, given the US-Swiss rows about tax evasion issues over recent years.

Julius Baer took full control of UK operations last year, following the August 2012 agreement to buy the Merrill business from Bank of America; in December last year, it announced that operations in Lebanon, Bahrain and UAE had been fully transferred. Transfers are under way also in Switzerland, Singapore, Chile, Spain, Monaco, Luxembourg and Hong Kong. The transfers in certain regions have been announced over a period of stages.