From [HERE] Merrill Lynch has agreed to pay $19.95 million to settle a class-action lawsuit claiming it discriminated against African American financial advisors, according to a filing on Friday in federal court in Florida. 

The lawsuit, which dates back to July 2021, was brought by four former Merrill advisors who sought “to challenge discriminatory compensation and promotion practices at Merrill.” They alleged that African American brokers were afforded fewer “business opportunities,” including less support and more difficulty joining teams relative to their white counterparts. 

As a result, African American financial advisors were terminated or “washed out” at higher rates than their white counterparts, and fewer earned corporate titles such as senior financial advisor or private wealth advisor. 

The proposed sum is earmarked to fund payments to at least 1,000 eligible class members who were previously disadvantaged because of their race in addition to covering administration costs and $6.6 million in attorney fees. The settlement must be approved by a judge before it is final. 

“We reached an agreement to resolve this matter so we could focus on initiatives to assist Black financial advisors and their clients,” a spokesperson for Merrill said in an emailed statement. The wirehouse has also “implemented numerous policies and programs over the last 10 years,” including annual leadership symposiums, workshops and increased training and coaching to improve diversity and inclusion, the spokesperson added.  

Over the past decade, the number of Black financial advisors at Merrill has increased by more than 40%, and representation on teams has more than tripled, the spokesperson said. 

As part of the proposed settlement, Merrill agreed to additional policy changes governing how it trains employees and newbie financial advisors about diversity and facilitates teaming among existing advisors. 

Merrill said it would educate employees about how to “recognize implicit or unconscious bias” and “create an inclusive work environment that will evaluate employees and candidates fairly,” according to the Friday filing.