Wirehouses Resist Telecommuting Trend

Merrill Lynch is one of the most progressive companies in the United States when it comes to telecommuting. With a state-of-the-art "simulation lab" to give employees a two-week pseudo-telecommuting experience before they make the actual work-at-home jump, Merrill has been recognized by Business Week as one of the country's "telecommuting-friendly employers."Unfortunately for the firm's 15,000 brokers,

Merrill Lynch is one of the most progressive companies in the United States when it comes to telecommuting. With a state-of-the-art "simulation lab" to give employees a two-week pseudo-telecommuting experience before they make the actual work-at-home jump, Merrill has been recognized by Business Week as one of the country's "telecommuting-friendly employers."

Unfortunately for the firm's 15,000 brokers, registered reps are rarely among the chosen few fortunate enough to participate in the program. Why? Legal executives at Merrill point to NYSE Rule 342, which governs the supervision of brokers.

Basically, those regulations could require Merrill representatives working on a regular basis from home to register that location as a Merrill Lynch branch office, says Ken Spirer, first vice president and assistant general counsel with the firm.

"Registering as an office carries with it some responsibilities and consequences," Spirer says. For example, branch offices are subject to inspection by SROs and state regulators, and branches are required to maintain certain records on-site or make them readily available. "You can imagine, if everyone's home became an office, the total inability to comply with the requirement that you keep formal business records in the office available for inspection," Spirer says. "It's not very efficient, especially in this day and age of centralized record keeping."

When wirehouses do find ways to accommodate a broker, they do so discreetly. "Some of the larger firms feel that a person working from a remote location should not advertise that, put up signs or put the address on their business card," Spirer says.

Apparently, large firms that do allow brokers to work from home would rather not publicize those situations. In fact, Registered Representative had planned to interview a rep from another wirehouse for this article, but the firm nixed the idea. A spokesperson explained that the firm was unclear on its policies regarding telecommuting.

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