Von Aldo
Merrill Lynch Firing Unproductive FAs? No WAY!!!!!

Merrill Lynch Firing Unproductive FAs? No WAY!!!!!

penalty-boxDow Jones' "scoop" about how Merrill Lynch will begin firing aging financial advisors who don't produce at least $250,000 isn't a scoop at all. It's called the "penalty box" and most firms have such a thing. Wall Street has always operated on the concept: Devil take the hindmost.

And then Business Insider's Cluster Stock blog got a hold of it (complete with a Donald Trump image, "You're Fired"). But the fact of the matter is firms have been pushing out lousy producers for years (by reducing their payouts into the 20 percent range or by outright firing them). In fact, we've heard the number can be as high as around $330,000 and under in production.

Again, most firms, including Merrill, put underachieving advisors in the penalty box, where their payouts are reduced. A Merrill person I spoke to said that FAs at Merrill who are having trouble are put in the penalty box "indefinitely." This person said, "We want people to succeed. . . . There are often mitigating circumstances [for underperformance]." Further, FAs in production trouble are given help by way of additional training and other support. "If you have LOS of 10 years and are not producing $250,000, you are not doing well." Those are the kinds of advisors Merrill is putting in the penalty box --- an old process, nothing new --- and given some help to get out. The payout is dropped into the 20-percent range. One wonders: How can an advisor live on such a low payout?

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish