Merrill Lynch plans to exit the Canadian retail-brokerage business because it cannot attract enough of the country’s wealthiest investors. The news comes just weeks after the firm pledged to stay in Canada this time around.

The Globe and Mail is reporting that Merrill made the announcement Tuesday night in a memo to staff. The memo said that Merrill is considering selling its 1,000-person network of Canadian brokers, and the $50 billion in business they manage.

This would be Merrill’s second retreat from Canada. Currently the firm has one of the three largest sales forces in the country, behind Royal Bank of Canada and Bank of Montreal.

There’s some thought that it might maintain a handful of branches in major cities, or an elite force of brokers serving only the wealthiest clients. But the firm is set to walk away from the average Canadian investor.

Possible buyers are said to include Royal Bank, a management buyout, BMO Nesbitt Burns, CIBC and HSBC.

Merrill plans to retain an institutional business in Canada to cater to corporations and pension funds. Those employees have already been offered the opportunity to take a voluntary buyout or a sabbatical, and this may be followed by layoffs, if enough workers don’t walk voluntarily.

It is also being reported that Merrill might scrap is joint online venture with HSBC, and it may also dump its retail forces in Europe and Japan.

This news is all too familiar for Merrill, which only bought a huge Canadian retail sales force in 1998 with its $1.3 billion takeover of Midland Walwyn Inc. Back in 1990, it sold its retail operation to Wood Gundy as the recession set in. It then paid a huge premium to get back in.