Evans and Partners score

Merrill Lynch has entered into an alliance with Evans and Partners, under which the bulk of the Wall Street firm's private-client brokers will transfer to the brokerage. The move comes as Merrill bulks up its Australian institutional banking and trading business in a push to become a big player.

Under the terms of the alliance, Evans and Partners brokers will sell Merrill Lynch investment products and global and local research to its private clients. The arrangement will also see some Merrill Lynch financial advisers and private wealth clients move across to Evans and Partners.

The deal represents rapid growth for Evans and Partners, which was launched three years ago out of the suburban Melbourne home of Goldman Sachs JBWere's former head of equities, David Evans. He set up his brokerage to focus on wealthy investors as his former employer started to reduce its focus on the local private client market. Goldman Sachs eventually sold its JBWere private-client business to National Australia Bank.

Unusually, Evans and Partners and Merrill opted against an equity tie-up, which has become a standard arrangement between large brokerages and smaller independent houses in recent years. Bell Potter is part-owned by UBS, Deutsche Bank has a stake in Wilson HTM, Credit Suisse owns part of EL & C Baillieu and JPMorgan has a stake in Ord Minnett. And Citigroup and Morgan Stanley last year launched the local arm of their retail broking venture.

Mr Evans said his firm's decision to retain its independence sent an important message to clients. "I was adamant that our firm remained fully owned by the partners," he said.

Large investment banks need access to a retail broking network to help sell capital markets products, and distribution is often regarded as crucial in winning initial public offering mandates and capital raisings. Merrill Lynch Australia's chief executive, Craig Drummond, said the tie-up would give his firm access to the substantial client list of Evans and Partners, while also delivering an expanded product and service offering for Merrill's private clients.