Merrill Lynch has committed to a settlement of $19.95 million to conclude a class-action lawsuit that accused the company of widespread discriminatory practices. These practices allegedly led to lower compensation and fewer promotional opportunities for Black advisors compared to their white counterparts.
The lawsuit highlighted that Merrill Lynch did not provide equivalent support to Black trainees and advisors, asserting that the company engaged in discriminatory behaviors by restricting access to prime leads, lucrative account distributions, and equitable teaming opportunities. Such actions reportedly hindered the ability of Black advisors to enhance their earnings based on production.
The complaint, filed in Florida’s Middle District federal court, contended, "These overarching policies and procedures have detrimentally impacted the compensation, promotional prospects, and general working conditions of African-American financial advisors relative to their white peers."
Merrill Lynch, a subsidiary of Bank of America, recognized the settlement and affirmed its commitment to enhancing career paths for its Black advisors, stating, "We have decided to settle this matter to focus more on supporting initiatives that benefit Black financial advisors and their clientele."
The lawsuit sought reparations for a proposed class encompassing all Black advisors employed by Merrill since October 9, 2016, pending court approval of the settlement.
This resolution marks a continuation of challenges within the wealth management sector to diversify its workforce and ensure equal career and income opportunities across all demographics. Issues of racial and gender discrimination are prevalent, with the industry still being predominantly white and male.
The origins of the case trace back to a 2021 class action proposal by two former Black Merrill advisors, Lucinda J. Council and Ravynne Gilmore. The case was later moved to a federal venue in Florida, with additional former Black advisors, Verna Maitland and Hilari Ngufor, joining as named plaintiffs.
The lawsuit further claimed that discriminatory policies at Merrill Lynch not only obstructed professional advancement opportunities for Black advisors but also led to higher termination rates among them compared to their white colleagues.
In response, Merrill Lynch highlighted that over the last decade, it has introduced numerous initiatives aimed at fostering the professional growth of Black advisors. These initiatives include workshops, leadership symposiums, and enhanced coaching and training programs.
The company noted a 40% increase in the number of Black advisors over the past decade and a significant enhancement in their representation on teams, although specific employment figures were not disclosed.
