Bank of America appoints Thain

Move raises queries over fate of Boston wealth operation

Bank of America Corp. yesterday put the chief executive of Merrill Lynch & Co. in charge of its vast new investment arm, raising questions about whether its wealth management operations will remain in Boston after the merger of the two companies.

Bank of America said John Thain would become the president of the combined company's global banking, securities, and wealth management business after the Charlotte, N.C., bank completes its $50 billion stock purchase of the storied New York investment bank, a shotgun marriage prompted by the credit crisis last month.

Thain will oversee operations including investment banking and, in Boston, Bank of America's big global wealth and investment management business, which includes its Columbia Management mutual fund unit and its U.S. Trust private banking division. A bank spokesman said the company is still determining how it will combine those units with similar operations at Merrill.

Though the appointment generated speculation that Thain is a candidate to succeed Bank of America chief executive Kenneth D. Lewis, a spokesman said Thain technically is no more senior than the 10 other members of Lewis's "management team."

The spokesman, James Mahoney, said it is premature to discuss whether any Boston jobs might be moved to New York. But he added the bank does not foresee major changes in employment levels in New England following the merger. The bank employs about 18,000 people in New England, but doesn't break out how many of those jobs are in the global wealth unit here.

"Boston remains as one of the major centers of Bank of America, the others being New York and Charlotte," Mahoney said.

He said it remains under discussion whether the current head of the global wealth unit in Boston, Keith Banks, will stay, and under what capacity.

Robert Ellis, a wealth management specialist for New York consulting company Celent, predicted Thain would considerably remake the investment management operations of the combined company, including possibly selling or spinning off parts of it.

Merrill Lynch did just that with its own funds unit in 2006, which it sold to Black Rock Inc. Clients might not trust a broker's recommendation to put money in a mutual fund managed by his own company, Ellis said.

Bank of America has yet to determine how it will integrate other operations it has with similar units at Merrill Lynch, such as its Boston-based U.S. Trust private banking unit, meant for wealthier clients, and the similar First Republic business at Merrill.

Also yesterday, the bank said another senior executive, Brian Moynihan, would return to Boston after running Bank of America's investment banking operations in New York. Moynihan will run the bank's private equity and global operations, which includes its technology and supply chain management functions, covering 10,000 people in all, Mahoney said.

Anne Finucane will continue in her role in Boston as the company's chief marketing officer, overseeing a $2 billion budget for the bank's branding, advertising, and philanthropy efforts and its lobbying functions, Mahoney said. Both Finucane and Moynihan are also members of Lewis's management team.

Moynihan and Finucane are among the few senior executives remaining at Bank of America following its $48 billion purchase of FleetBoston Financial Corp. in 2004. The bank put its global wealth business in Boston following criticism the deal would lead to job cuts here.

Ross Kerber can be reached at kerber@globe.com.