ML PMD Program PCs

[quote=FADavo]

I was wondering if you get "bonus" phantom PCs that count toward PMD program goals if they fee is annuitized?  

I spoke with a rep that used to be in the POA program back in the early 2000s and he said they would get "phantom PCs" that would not count toward what they were PAID, but would count toward their hurdles.  He said it would be anywhere from 2 to 4x depending on the trail/product.  

Do they still do this?  I have combed the forum and seen nothing specifically stated about this in all the PMD program discussion, and I know the 3 year PC goal is really the primary hurdle (as the NNA and NNH don't seem all that high).

Thanks in advance.

-Dave

[/quote]

No phantom PC's.

I don't know about receiving "phantom PCs" for annuitized business, but I do believe they give phantom PCs for referrals to Merrill Edge.  I'm also in the PMD program and we recently had someone from Merrill Edge come in to talk to us and said that if you refer people over to Merrill Edge you'll get credit for NNAA, NNHH and PCs while in the PMD program to meet hurdles, but once we are out of the program we would not be paid on those.  He didn't refer to them as "phantom PCs", but they are effectively phantom PCs.  

I could be totally wrong, but this is how I understood what he said to us.  

[quote=CFP2BE]

I do

Yeah, I dunno if it's Mother Merrill or BOA, but the bureaucracy is RIDICULOUS!!!!!!!  One of my main complaints there.  Best of luck.

Love,

You're right, being at ML one has to be a big producer to make any real money.  That's why most people (myself included) go there to build a book and networks while collecting a salary, then they go indy and get a big fat pay raise.  I wouldn't shed a single tear if they boot me out of the PMD program. 

Most people who stay there want the prestige of being able to say they work at Merrill Lynch.  I'll take the $$$, thank you very much!

[quote=LoveInvesting]you'

[quote=CFP2BE]

Thanks for the response.  I actually got offered the job and am going through the background check part.  Holy hell is this thing insane.  I had to call to ask questions about it because I worked for my own LLC that consulted for others and didn't know how to list it on the employment search (they said to list it as the working for the LLC and then comment about it in the notes, btw).  Damn, that email they send about it is freaking scary.  If I get anything wrong it will come back unsatisfactory and they pull the offer?  wow.  

I have nothing that will pop up on the background check, but I was surprised with how insane they were about the employment check.  

[/quote]

Answer the questions honestly and you will be fine.  What they are looking for is anything that might prevent your U-4 from going through smoothly and internal compliance/conflict checks.  They'll dig a little deeper to confirm that you are not actively working a side business if you list yourself as a owner, director, manager, etc. but not as an employee.  Even if you are a managing member of an LLC, listing 12 hours a year to "maintain the LLC" should still be fine...but they can get wierd in compliance and you may need to clarify.

Good luck.

[quote=FADavo]

[quote=LoveInvesting]you're at ml, not gonna make much[/quote]

quality post.  

The average production at ML just broke 900K, and with their bonus payout pushing those producers to something close to 50%, I doubt that most people here would say that the average guy making 425-450K is doing a little better than "not making much".

Just a thought.

[/quote]

That's like saying being a professional baseball player in the US is where to be since the "average" incomes are so high.  How many single-A players does it take to equal one A-Rod?

While true that ML represents a better "Bell Curve" than most others with the higher "average" - you need to take into account many, many factors including LOS, location, current markets/environment.  It's great to know it's possible but it doesn't remove the strong odds and material fact that median/mean = lies, damn lies, and statistics. Don't be fooled by marketing. 5 years of hard, hard work and some luck to even get in the game no matter where you are.

Good luck.

[quote=JustDoIt]

[quote=JustDoIt]

[

FADavo,

Yeah, but the 10-15% of $1 mil is $100-$150k IN YOUR POCKET!!!  That is not chump change!  That's a very nice salary on its own!  Moreover, working at Merrill you really don't "work for yourself".  You are an employee.  You wanna create your own powerpoint for a seminar?  Good luck getting it through compliance!  They'll ask you 'why don't you use a pre-approved Merrill presentation?'  COS IT'S DOGSH*T, THAT'S WHY!!!  Most of their marketing material is dogsh*t!  You wanna create a blog to post some thoughts and tips?  Nope.  You wanna prospect through linkedin or facebook?  nuh uh.  I'll take a pay raise and go indy, and be truly "self-employed", thank you very much.

FADavo, the Average Revenue is over $900,000 but that is different than Average PCs, which is around $750,000.  Revenue includes things that don't pay anything to the advisor, such as fund fees paid to directly to ML or the spread on CDs.  But to your point, it's still a decent living at a +40% payout.  However, keep in mind the median is much lower than the average because of the massive revenue from the biggest producers.  

Please run your projected income into the fifth year.  When you come out of PMD, you will lose the $40,000 salary (higher or lower, depending on the PMD), which is equivalent to $100,000 PCs.  Your salary will most likely drop in the fourth year and fifth year. 

CFP2BE, if a PMD is doing $1 million in PCs (will never happen), he or she can opt out of PMD and go directly onto the grid.  And not all of the PMD grid is at 15%, the higher amounts are at 47%.

 I don't think being an "employee" really makes that big a difference, you still own your clients.  With Protocol Agreements so common now (allows you to take your book with you), that's all that really matters. 

Not trying to threadcrap, just fact checking for you guys, with some of my dumb opinions mixed in.

[quote=CFP2BE]

[quote=BACFA]

FADavo,

Within the last couple of weeks ML sent out an email talking about a linkedin pilot they are running.  I asked my compliance officer about prospecting through facebook and linkedin, as well as writing a blog, my compliance officer said no, it's against ML policy.  So, I don't know how or if the FAs you're referring to got clearance to do what they're doing (maybe they're part of a pilot), but I was given the predictable no from compliance.

[quote=FADavo]

[quote=BACFA]

FADavo, the Average Revenue is over $900,000 but that is different than Average PCs, which is around $750,000.  Revenue includes things that don't pay anything to the advisor, such as fund fees paid to directly to ML or the spread on CDs.  But to your point, it's still a decent living at a +40% payout.  However, keep in mind the median is much lower than the average because of the massive revenue from the biggest producers.  

Please run your projected income into the fifth year.  When you come out of PMD, you will lose the $40,000 salary (higher or lower, depending on the PMD), which is equivalent to $100,000 PCs.  Your salary will most likely drop in the fourth year and fifth year. 

CFP2BE, if a PMD is doing $1 million in PCs (will never happen), he or she can opt out of PMD and go directly onto the grid.  And not all of the PMD grid is at 15%, the higher amounts are at 47%.

 I don't think being an "employee" really makes that big a difference, you still own your clients.  With Protocol Agreements so common now (allows you to take your book with you), that's all that really matters. 

Not trying to threadcrap, just fact checking for you guys, with some of my dumb opinions mixed in.

[/quote]

your points are well taken.  The only one that doesn't make sense is the "drop in pay" for year 4 and 5.  That doesn't add up to me.  

To get the PCs to graduate, you probably need to be on a projection (MINIMUM) that looks like this:

Year 1  2.5 million new, production at 20K

2 7.5 million new, 10 million total AUM, production at 80K, aggregate of 100K PCs

3 10 million new, 20 million total AUM, production of 160K, aggregate of 260K PCs.

So in year three, just to meet the MINIMUM (250 PCs being the hurdle) you need to be at around 20mm in assets. So project that growth for year 4 and 5:

4 = 12 Million in new, 32 million in total AUM, production of 260K.  At a 40% payout that is 103K.  

5 = 12 million in new, 44 million in total aum, production of 350K.  At a 40% payout that is 140K.

both of those, again, at only expected minimum growth that would barely keep you in the program (3rd quartile), would mean that year 4-5 would be bigger payouts than 1,2 or 3.

Maybe I am missing something?

[/quote]

FADavo,

1.  The numbers in your example for a PMD are unrealistic and impossible to achieve.  $7.5mm in year 2 and $10mm in year 3 canot be done unless you're teaming with a senior FA or you have Dad handing you his book.    $10mm is a big number even for experienced advisors, and that's with existing clients and a steady schedule of seminars.  And you'd have to be Gordon Gekko to raise $12mm in your 4th year.  This is regardless of hard work, great leads, amazing networking, sleeping on a cot in your office.  Your numbers are impossible without some sort of outside help.

2. A more likely scenario for most non-partnered PMDs is that they survive the program by doing high commission products so they can hit the PC hurdles (generally considered the hardest one to meet).  However, that sacrifices your recurring revenue in year 4.  Your salary is only "weaned off" for two years so I'd say it's closer to rolling off a cliff.  I'm not going to do the math here but for most PMDs, they are losing $40k-$45k salary when the graduate.  So, in year 4, not only do you have much lower recurring revenue than in your example, you are also dealing with a $0 base.  

3. Assuming you are on a team and make it through the PMD program, the team will expect you to bring a lot of new assets that have to be split.  Or, in many cases, they feel that they got you through the program and owe you nothing and decide to split the accounts you opened the first 3 years.  

I've spoken with many PMD's and FA's and this harsh reality is why only 10% finish the program.  And most of those that finish, are blood relatives of an FA.

My advice would be to get in early, stay late, and get to know the successful advisors in the office.  Experienced FAs will most likely ignore you but it will be up to you to make an impression.  Someone will notice and invite you on their team.  

[quote=ZwingDing]

IMO, it is a mistake to think of the guaranteed up-front income as a salary. It is actually a non-recoverable draw against commissions. The draw slowly winds down to $0 at the end of the PMD program. During the program you are eligible for monthly commissions only if they are in excess of the non-recoverable draw. That is a draw NOT a salary. If you are entering the PMD program you need to understand the difference. This is not a corporate B2B sales position with a salary to even out the highs and lows of commissions. It is a short-term draw to get you started and then to wean you off of in anticipation of being straight commish.

BTW: Many PMD's see their income go down when they exit the program. One thing you want to watch is discounting your managed money clients to get their business. Once you exit you will find that your income is going backward while they are getting a break.

You are eligible for a quarterly bonus and an annual pay-out based on exceeding the relevant hurdles AND a subjective judgement by the local manager that you are in good stead at the office.

[/quote]

ZwingDing,

You are correct, the salary really isn't a salary but I would equate it more as a forgiveable draw.  Technically, you have to beat your salary and one-third of last quarter's bonus to get paid anything additional for the month.  However, you don't get penalized for missing your numbers if you don't hit it (hence, it's "forgiven" for the following month).  

My advice would be to sandbag your revenue and have a huge month one month per quarter.  Hopefully, you can hit your hurdles for the quarter (collecting your quarterly bonus) and the additional PCs for the big month are paid as high as 47%.

[quote=BACFA]

[quote=FADavo]

[quote=BACFA]

FADavo, the Average Revenue is over $900,000 but that is different than Average PCs, which is around $750,000.  Revenue includes things that don't pay anything to the advisor, such as fund fees paid to directly to ML or the spread on CDs.  But to your point, it's still a decent living at a +40% payout.  However, keep in mind the median is much lower than the average because of the massive revenue from the biggest producers.  

Please run your projected income into the fifth year.  When you come out of PMD, you will lose the $40,000 salary (higher or lower, depending on the PMD), which is equivalent to $100,000 PCs.  Your salary will most likely drop in the fourth year and fifth year. 

CFP2BE, if a PMD is doing $1 million in PCs (will never happen), he or she can opt out of PMD and go directly onto the grid.  And not all of the PMD grid is at 15%, the higher amounts are at 47%.

 I don't think being an "employee" really makes that big a difference, you still own your clients.  With Protocol Agreements so common now (allows you to take your book with you), that's all that really matters. 

Not trying to threadcrap, just fact checking for you guys, with some of my dumb opinions mixed in.

[/quote]

your points are well taken.  The only one that doesn't make sense is the "drop in pay" for year 4 and 5.  That doesn't add up to me.  

To get the PCs to graduate, you probably need to be on a projection (MINIMUM) that looks like this:

Year 1  2.5 million new, production at 20K

2 7.5 million new, 10 million total AUM, production at 80K, aggregate of 100K PCs

3 10 million new, 20 million total AUM, production of 160K, aggregate of 260K PCs.

So in year three, just to meet the MINIMUM (250 PCs being the hurdle) you need to be at around 20mm in assets. So project that growth for year 4 and 5:

4 = 12 Million in new, 32 million in total AUM, production of 260K.  At a 40% payout that is 103K.  

5 = 12 million in new, 44 million in total aum, production of 350K.  At a 40% payout that is 140K.

both of those, again, at only expected minimum growth that would barely keep you in the program (3rd quartile), would mean that year 4-5 would be bigger payouts than 1,2 or 3.

Maybe I am missing something?

[/quote]

FADavo,

1.  The numbers in your example for a PMD are unrealistic and impossible to achieve.  $7.5mm in year 2 and $10mm in year 3 canot be done unless you're teaming with a senior FA or you have Dad handing you his book.    $10mm is a big number even for experienced advisors, and that's with existing clients and a steady schedule of seminars.  And you'd have to be Gordon Gekko to raise $12mm in your 4th year.  This is regardless of hard work, great leads, amazing networking, sleeping on a cot in your office.  Your numbers are impossible without some sort of outside help.

2. A more likely scenario for most non-partnered PMDs is that they survive the program by doing high commission products so they can hit the PC hurdles (generally considered the hardest one to meet).  However, that sacrifices your recurring revenue in year 4.  Your salary is only "weaned off" for two years so I'd say it's closer to rolling off a cliff.  I'm not going to do the math here but for most PMDs, they are losing $40k-$45k salary when the graduate.  So, in year 4, not only do you have much lower recurring revenue than in your example, you are also dealing with a $0 base.  

3. Assuming you are on a team and make it through the PMD program, the team will expect you to bring a lot of new assets that have to be split.  Or, in many cases, they feel that they got you through the program and owe you nothing and decide to split the accounts you opened the first 3 years.  

I've spoken with many PMD's and FA's and this harsh reality is why only 10% finish the program.  And most of those that finish, are blood relatives of an FA.

My advice would be to get in early, stay late, and get to know the successful advisors in the office.  Experienced FAs will most likely ignore you but it will be up to you to make an impression.  Someone will notice and invite you on their team.  

[/quote]

I was with you right up to the point that you said only 10% graduate the PMD program. I'm not saying that is wrong, but I am saying it sounds low. I'd need something other than anecdotal evidence that the pass rate is that low.

I would guess it's more like 25-30% make it. That is still incredibly low.

[quote=BACFA]

[quote=ZwingDing]

IMO, it is a mistake to think of the guaranteed up-front income as a salary. It is actually a non-recoverable draw against commissions. The draw slowly winds down to $0 at the end of the PMD program. During the program you are eligible for monthly commissions only if they are in excess of the non-recoverable draw. That is a draw NOT a salary. If you are entering the PMD program you need to understand the difference. This is not a corporate B2B sales position with a salary to even out the highs and lows of commissions. It is a short-term draw to get you started and then to wean you off of in anticipation of being straight commish.

BTW: Many PMD's see their income go down when they exit the program. One thing you want to watch is discounting your managed money clients to get their business. Once you exit you will find that your income is going backward while they are getting a break.

You are eligible for a quarterly bonus and an annual pay-out based on exceeding the relevant hurdles AND a subjective judgement by the local manager that you are in good stead at the office.

[/quote]

ZwingDing,

You are correct, the salary really isn't a salary but I would equate it more as a forgiveable draw.  Technically, you have to beat your salary and one-third of last quarter's bonus to get paid anything additional for the month.  However, you don't get penalized for missing your numbers if you don't hit it (hence, it's "forgiven" for the following month).  

My advice would be to sandbag your revenue and have a huge month one month per quarter.  Hopefully, you can hit your hurdles for the quarter (collecting your quarterly bonus) and the additional PCs for the big month are paid as high as 47%.

[/quote]

non-recoverable draw = forgiveable draw, which is to say that there is no recovery of the draw if you do not cover it with actual commissions.

BTW: I was under the impression there are no FA's left at BAC which would mean you are a ML FA. Are you clinging to the past or is there a new program to put FA's back into the BAC branches?

[quote=BACFA]

[quote=ZwingDing]

IMO, it is a mistake to think of the guaranteed up-front income as a salary. It is actually a non-recoverable draw against commissions. The draw slowly winds down to $0 at the end of the PMD program. During the program you are eligible for monthly commissions only if they are in excess of the non-recoverable draw. That is a draw NOT a salary. If you are entering the PMD program you need to understand the difference. This is not a corporate B2B sales position with a salary to even out the highs and lows of commissions. It is a short-term draw to get you started and then to wean you off of in anticipation of being straight commish.

BTW: Many PMD’s see their income go down when they exit the program. One thing you want to watch is discounting your managed money clients to get their business. Once you exit you will find that your income is going backward while they are getting a break.

You are eligible for a quarterly bonus and an annual pay-out based on exceeding the relevant hurdles AND a subjective judgement by the local manager that you are in good stead at the office.

[/quote]

ZwingDing,

You are correct, the salary really isn’t a salary but I would equate it more as a forgiveable draw.  Technically, you have to beat your salary and one-third of last quarter’s bonus to get paid anything additional for the month.  However, you don’t get penalized for missing your numbers if you don’t hit it (hence, it’s “forgiven” for the following month).  

My advice would be to sandbag your revenue and have a huge month one month per quarter.  Hopefully, you can hit your hurdles for the quarter (collecting your quarterly bonus) and the additional PCs for the big month are paid as high as 47%.

[/quote]

non-recoverable draw = forgiveable draw, which is to say that there is no recovery of the draw if you do not cover it with actual commissions.

BTW: I was under the impression there are no FA’s left at BAC which would mean you are a ML FA. Are you clinging to the past or is there a new program to put FA’s back into the BAC branches?

Will ML PMD allow you to stay in program if u fail series 7 on first go round. A friend of mine got a 63. What if he offers a promissory note for any pay from failure of test until he passes?

[quote=BACFA]

[quote=ZwingDing]

[quote=CFP2BE]

[quote=BACFA]

[quote=ZwingDing]

[quote=BACFA]

[quote=ZwingDing]

IMO, it is a mistake to think of the guaranteed up-front income as a salary. It is actually a non-recoverable draw against commissions. The draw slowly winds down to $0 at the end of the PMD program. During the program you are eligible for monthly commissions only if they are in excess of the non-recoverable draw. That is a draw NOT a salary. If you are entering the PMD program you need to understand the difference. This is not a corporate B2B sales position with a salary to even out the highs and lows of commissions. It is a short-term draw to get you started and then to wean you off of in anticipation of being straight commish.

BTW: Many PMD's see their income go down when they exit the program. One thing you want to watch is discounting your managed money clients to get their business. Once you exit you will find that your income is going backward while they are getting a break.

You are eligible for a quarterly bonus and an annual pay-out based on exceeding the relevant hurdles AND a subjective judgement by the local manager that you are in good stead at the office.

[/quote]

ZwingDing,

You are correct, the salary really isn't a salary but I would equate it more as a forgiveable draw.  Technically, you have to beat your salary and one-third of last quarter's bonus to get paid anything additional for the month.  However, you don't get penalized for missing your numbers if you don't hit it (hence, it's "forgiven" for the following month).  

My advice would be to sandbag your revenue and have a huge month one month per quarter.  Hopefully, you can hit your hurdles for the quarter (collecting your quarterly bonus) and the additional PCs for the big month are paid as high as 47%.

[/quote]

non-recoverable draw = forgiveable draw, which is to say that there is no recovery of the draw if you do not cover it with actual commissions.

BTW: I was under the impression there are no FA's left at BAC which would mean you are a ML FA. Are you clinging to the past or is there a new program to put FA's back into the BAC branches?

[/quote]

ZwingDing:  I don't think Merrill will ever publish their true PMD failure rates.  But I would agree that a pass rate from 10% to 30% is still abysmal.  My anecdotal evidence is mostly from recruiters that write in our various trade magazines (including this one) and my friends at Merrill in other offices.  

I still have access to my old BAC branches but my book is large enough that I don't go there any more.  I'm lurking in the Rookie forum because I'm thinking of working with a PMD.  Merrill and Bank of America have pilot programs where they put FAs in the branches.  I don't think they are PMDs but are advisors from Edge.  That is where bank referrals end up, anyway (and then triaged out to the Complexes).  Not putting PMD's in the bank branches is a terrible waste of potential.  The PMD hurdles would be almost guaranteed with access to CD's, large checking and savings accouts, etc.

[quote=Paradigm]Will ML PMD allow you to stay in program if u fail series 7 on first go round. A friend of mine got a 63. What if he offers a promissory note for any pay from failure of test until he passes?[/quote]

Paradigm:  I don't know how many chances a PMD can take the Series 7 but there are so many PMD candidates that they will not do whatever you're asking them to do. 

[quote=FADavo]

[quote=BACFA]

[quote=FADavo]

[quote=BACFA]

FADavo, the Average Revenue is over $900,000 but that is different than Average PCs, which is around $750,000.  Revenue includes things that don't pay anything to the advisor, such as fund fees paid to directly to ML or the spread on CDs.  But to your point, it's still a decent living at a +40% payout.  However, keep in mind the median is much lower than the average because of the massive revenue from the biggest producers.  

Please run your projected income into the fifth year.  When you come out of PMD, you will lose the $40,000 salary (higher or lower, depending on the PMD), which is equivalent to $100,000 PCs.  Your salary will most likely drop in the fourth year and fifth year. 

CFP2BE, if a PMD is doing $1 million in PCs (will never happen), he or she can opt out of PMD and go directly onto the grid.  And not all of the PMD grid is at 15%, the higher amounts are at 47%.

 I don't think being an "employee" really makes that big a difference, you still own your clients.  With Protocol Agreements so common now (allows you to take your book with you), that's all that really matters. 

Not trying to threadcrap, just fact checking for you guys, with some of my dumb opinions mixed in.

[/quote]

your points are well taken.  The only one that doesn't make sense is the "drop in pay" for year 4 and 5.  That doesn't add up to me.  

To get the PCs to graduate, you probably need to be on a projection (MINIMUM) that looks like this:

Year 1  2.5 million new, production at 20K

2 7.5 million new, 10 million total AUM, production at 80K, aggregate of 100K PCs

3 10 million new, 20 million total AUM, production of 160K, aggregate of 260K PCs.

So in year three, just to meet the MINIMUM (250 PCs being the hurdle) you need to be at around 20mm in assets. So project that growth for year 4 and 5:

4 = 12 Million in new, 32 million in total AUM, production of 260K.  At a 40% payout that is 103K.  

5 = 12 million in new, 44 million in total aum, production of 350K.  At a 40% payout that is 140K.

both of those, again, at only expected minimum growth that would barely keep you in the program (3rd quartile), would mean that year 4-5 would be bigger payouts than 1,2 or 3.

Maybe I am missing something?

[/quote]

FADavo,

1.  The numbers in your example for a PMD are unrealistic and impossible to achieve.  $7.5mm in year 2 and $10mm in year 3 canot be done unless you're teaming with a senior FA or you have Dad handing you his book.    $10mm is a big number even for experienced advisors, and that's with existing clients and a steady schedule of seminars.  And you'd have to be Gordon Gekko to raise $12mm in your 4th year.  This is regardless of hard work, great leads, amazing networking, sleeping on a cot in your office.  Your numbers are impossible without some sort of outside help.

2. A more likely scenario for most non-partnered PMDs is that they survive the program by doing high commission products so they can hit the PC hurdles (generally considered the hardest one to meet).  However, that sacrifices your recurring revenue in year 4.  Your salary is only "weaned off" for two years so I'd say it's closer to rolling off a cliff.  I'm not going to do the math here but for most PMDs, they are losing $40k-$45k salary when the graduate.  So, in year 4, not only do you have much lower recurring revenue than in your example, you are also dealing with a $0 base.  

3. Assuming you are on a team and make it through the PMD program, the team will expect you to bring a lot of new assets that have to be split.  Or, in many cases, they feel that they got you through the program and owe you nothing and decide to split the accounts you opened the first 3 years.  

I've spoken with many PMD's and FA's and this harsh reality is why only 10% finish the program.  And most of those that finish, are blood relatives of an FA.

My advice would be to get in early, stay late, and get to know the successful advisors in the office.  Experienced FAs will most likely ignore you but it will be up to you to make an impression.  Someone will notice and invite you on their team.  

[/quote]

You cannot meet the hurdles without meeting the numbers I just stated.  Explain how anyone pops 250K in PCs by year 3 if the numbers can't be met.  

On top of that "unrealistic" in what sense?  There are 5 PMDs at my office, 3 of which are under 24 LOS and have put away over 16 million.  

I cannot understand how the PC credits can be met without achieving those numbers, so stating that they are unrealistic seems "unrealistic" to me.  

Explain how you get to 250 PCs (for the LOWEST salary bracket, 360 for middle tier) without hitting those numbers?  

[/quote]

FADavo:  Well, right off the top of my head, if you do $10mm in variable annuities, that would be 250K PCs.  If you did life insurance or Lincoln Moneyguard, the percentage is even higher (than the 2.5% the that the VAs pay).  I don't have the PMD hurdles in front of me but I'm sure the right combination between PC's and annuitized business can be calculated using a spreadsheet.  

My Complex has at least 20 PMDs (large east coast area) and the only ones hitting all the hurdles are related to the senior advisor.  There are a few that are close because they're on a good team.  

I don't think what I stated is unrealistic.  I think the Merrill hurdles are unrealistic. 

[quote=Paradigm]Will ML PMD allow you to stay in program if u fail series 7 on first go round. A friend of mine got a 63. What if he offers a promissory note for any pay from failure of test until he passes?[/quote]

Not likely but possible. I believe it takes approval two management levels above the local branch manager to get that done.

So without approval of the regional manager hed be out of the program and a 63 may not be close enough for them to believe he could pass even if he has a strong network? Is that what you are saying?

[quote=BACFA]

[quote=ZwingDing]

[quote=BACFA]

[quote=ZwingDing]

IMO, it is a mistake to think of the guaranteed up-front income as a salary. It is actually a non-recoverable draw against commissions. The draw slowly winds down to $0 at the end of the PMD program. During the program you are eligible for monthly commissions only if they are in excess of the non-recoverable draw. That is a draw NOT a salary. If you are entering the PMD program you need to understand the difference. This is not a corporate B2B sales position with a salary to even out the highs and lows of commissions. It is a short-term draw to get you started and then to wean you off of in anticipation of being straight commish.

BTW: Many PMD's see their income go down when they exit the program. One thing you want to watch is discounting your managed money clients to get their business. Once you exit you will find that your income is going backward while they are getting a break.

You are eligible for a quarterly bonus and an annual pay-out based on exceeding the relevant hurdles AND a subjective judgement by the local manager that you are in good stead at the office.

[/quote]

ZwingDing,

You are correct, the salary really isn't a salary but I would equate it more as a forgiveable draw.  Technically, you have to beat your salary and one-third of last quarter's bonus to get paid anything additional for the month.  However, you don't get penalized for missing your numbers if you don't hit it (hence, it's "forgiven" for the following month).  

My advice would be to sandbag your revenue and have a huge month one month per quarter.  Hopefully, you can hit your hurdles for the quarter (collecting your quarterly bonus) and the additional PCs for the big month are paid as high as 47%.

[/quote]

non-recoverable draw = forgiveable draw, which is to say that there is no recovery of the draw if you do not cover it with actual commissions.

BTW: I was under the impression there are no FA's left at BAC which would mean you are a ML FA. Are you clinging to the past or is there a new program to put FA's back into the BAC branches?

[/quote]

ZwingDing:  I don't think Merrill will ever publish their true PMD failure rates.  But I would agree that a pass rate from 10% to 30% is still abysmal.  My anecdotal evidence is mostly from recruiters that write in our various trade magazines (including this one) and my friends at Merrill in other offices.  

I still have access to my old BAC branches but my book is large enough that I don't go there any more.  I'm lurking in the Rookie forum because I'm thinking of working with a PMD.  Merrill and Bank of America have pilot programs where they put FAs in the branches.  I don't think they are PMDs but are advisors from Edge.  That is where bank referrals end up, anyway (and then triaged out to the Complexes).  Not putting PMD's in the bank branches is a terrible waste of potential.  The PMD hurdles would be almost guaranteed with access to CD's, large checking and savings accouts, etc.

[/quote]

I agree that ML will never publish the true wash-out/success rate for the newbie program du jour. Your anecdotal evidence from recruiters is still pretty persuasive. If the wash-out rate is around that 10% figure then I would do the following math:

10% of PMD make it.

Of those 10% 1/2 are on teams that keep the PMD alive during the progarm.

That takes the survival for non-team PMD's down to 5%.

Of that 5% - an additional 3% (of the 100%) make it because they have pre-existing networks of people who they can access fairly quickly for sufficient assets to stay alive during the program.

That means that if you do not have a team that will feed you or a real strong network from which you can draw adequate assets the real survival rate is:

2% ----

I recently spoke with a 30+ ML vet in another time zone who characterized the PMD program as it now exists as an "atrocity." That is an exact quote.

I agree with you on putting PMD's in the BAC branches. Doing that would increase the survival rate by factors.

Anyone who thinks that this fail-out rate is not a pre-planned outcome by ML is kidding themselves. All it would take would be to hire sales managers who are solely judged on whether or not their PMD'ers make it. That is what corporate sales departments do. They would never stand by for a wash-out rate like this program.

We are about to lose a PMD. This person could be a great asset and producer to ML if they would just throw him a lifeline. He is superb with prospects and is ethical right to his DNA. But, the producers in the office are waiting to swoop in on the few decent accounts he has landed.

As long as the vulture FA's are dictating policy it will never chnage.

My advice to people looking to enter the field would be to stay away from the wires. Save up enough money so you can keep body and soul together and go to work for an indy, or start out at a bank/CU.

[quote=BACFA]

So is it safe to say that any PMD who fails the Series 7 will not be allowed to retest?

So is it safe to say that any PMD who fails the Series 7 will not be allowed to retest?

So is it safe to say that any PMD who fails the Series 7 will not be allowed to retest?

Paradigm:  Again, I don't know how many times someone is allowed to take the 7.  PMD hiring is inflated now because B of A would love a higher head count than Morgan Stanley.  Most PMD candidates claim they have an amazing network they can call so Managers tend to discount that unless it's someone on their second career.  If they were an accountant for 10 years prior to coming to ML, then they would consider that a good network.

ZwingDing:  I think even if someone drops out of PMD, having Merrill on their resume helps to get the next job.  And I know plenty of people that have left Merrill and are making a fantastic living.  Merrill has a way of brainwashing their advisors into thinking they are the only worthwhile company in town.

FADavo:  I know the PMD program very well and I have studied the PMD documents.  I know some of the PMD trainers down in Charlotte (from my B of A days) and in Hopewell.  I've run the various permutations of the PC vs. annuitized assets ratio and compared it with money that experienced advisors raise.  if you look at the $500k producers (across all channels, wire, indy, bank), their goals are generally $10mm/year in new assets.  This is coming from national training classes and confirmed even by Merrill's SPA awards.  I'm not saying that you can't or shouldn't be in the PMD program personally.  Nor am I telling you to give up.  I was just alluding to your original posts about PCs and raising money.  $10mm/year is a huge number for someone starting in the business.  And the fact that you are asking these questions on this forum, tells me that you want real answers from people that won't give you the canned answer from your PMD Coach.

[quote=Paradigm]So is it safe to say that any PMD who fails the Series 7 will not be allowed to retest?[/quote]

It's up to the local manager. If he/she/it decides you are worth it they have to convince their boss and their bosses of the same thing. The more typical thing, I think, is if you do not pass you 7 your stuff is sent home to you in a box. It's kind of way to show you MIGHT be a good hire.

I'm not saying it is right or wrong, but it's what I hear. I know that a person in an office of which I have personal knowledge did not pass and was not allowed back in the building.

[quote=BACFA]

Paradigm:  Again, I don't know how many times someone is allowed to take the 7.  PMD hiring is inflated now because B of A would love a higher head count than Morgan Stanley.  Most PMD candidates claim they have an amazing network they can call so Managers tend to discount that unless it's someone on their second career.  If they were an accountant for 10 years prior to coming to ML, then they would consider that a good network.

100% agree. Unless your network is ready to view you as an investment or insurance authority right away your network is worth diddly as a PMD.  PMD recruits fool themselves every day that they are different. You are not different.

ZwingDing:  I think even if someone drops out of PMD, having Merrill on their resume helps to get the next job.  And I know plenty of people that have left Merrill and are making a fantastic living.  Merrill has a way of brainwashing their advisors into thinking they are the only worthwhile company in town.

This is good to hear. Did the people to whom you are referring stay in financial services?

FADavo:  I know the PMD program very well and I have studied the PMD documents.  I know some of the PMD trainers down in Charlotte (from my B of A days) and in Hopewell.  I've run the various permutations of the PC vs. annuitized assets ratio and compared it with money that experienced advisors raise.  if you look at the $500k producers (across all channels, wire, indy, bank), their goals are generally $10mm/year in new assets.  This is coming from national training classes and confirmed even by Merrill's SPA awards.  I'm not saying that you can't or shouldn't be in the PMD program personally.  Nor am I telling you to give up.  I was just alluding to your original posts about PCs and raising money.  $10mm/year is a huge number for someone starting in the business.  And the fact that you are asking these questions on this forum, tells me that you want real answers from people that won't give you the canned answer from your PMD Coach.

Once you are in the PMD program there is no need to quit unless/until a better gig comes your way or you are told that your services are no longer required. My boss told me that I NEED to bring in $1M in assets a month. When I asked him if he could help me/coach me/mentor me to that end he said a flat: "No." That is not my strength.

[/quote]

[quote=BACFA]

FADavo, 

You are correct that there is a huge difference between 22 yo and 30 yo, especially if this is your 2nd career.  And in my opinion, a JD/FA is the best combination in our business (followed by a CPA/FA).  I and others have said that older, 2nd career advisors do much better than PMDs coming from the college job fair.

However, $10mm is still a big number.  A $3mm team can, and should be raising $30mm in new annuitized assets/year.  The fact that they're doing $3mm means that all of their clients have over $1 million to invest.  But a sub-$500k producer does not have a book full of millionaires that can refer their wealthy friends.  Now, if a 2nd career PMD has access those people, than yes, the $10mm is feasible.  However, most PMDs do not have that type of referral stream.

[quote=FADavo]

[quote=BACFA]

Paradigm:  Again, I don't know how many times someone is allowed to take the 7.  PMD hiring is inflated now because B of A would love a higher head count than Morgan Stanley.  Most PMD candidates claim they have an amazing network they can call so Managers tend to discount that unless it's someone on their second career.  If they were an accountant for 10 years prior to coming to ML, then they would consider that a good network.

ZwingDing:  I think even if someone drops out of PMD, having Merrill on their resume helps to get the next job.  And I know plenty of people that have left Merrill and are making a fantastic living.  Merrill has a way of brainwashing their advisors into thinking they are the only worthwhile company in town.

FADavo:  I know the PMD program very well and I have studied the PMD documents.  I know some of the PMD trainers down in Charlotte (from my B of A days) and in Hopewell.  I've run the various permutations of the PC vs. annuitized assets ratio and compared it with money that experienced advisors raise.  if you look at the $500k producers (across all channels, wire, indy, bank), their goals are generally $10mm/year in new assets.  This is coming from national training classes and confirmed even by Merrill's SPA awards.  I'm not saying that you can't or shouldn't be in the PMD program personally.  Nor am I telling you to give up.  I was just alluding to your original posts about PCs and raising money.  $10mm/year is a huge number for someone starting in the business.  And the fact that you are asking these questions on this forum, tells me that you want real answers from people that won't give you the canned answer from your PMD Coach.

[/quote]

The Branch Manager didn't even really talk numbers.  My numbers come from other FAs from all corners.  I am a career changer so I did a bunch of research and had access, prior to making the decision, to lots of top end guys.  

While I know none of what I am saying is the "norm" I also disagree that 10 a year is some sort of miracle.    As I stated earlier in the thread, I think the reason the guys at my particular branch or successful is because they tend to ONLY hire second career people.  I am the youngest PMD person there and I am 2 months from 30.  

I practiced law for 5 years first.  I can see how selling something when you are baby faced and 22 would be more difficult than when you have actually done something and are 30.

[/quote]

I don't know you from Adam and I mean absolutely no disrespect of any kind. That being said here is my view:

Being 29 is still very young. You are going to be dealing with people who are in their 50's, 60's, and 70's and age is still going to be an issue. I'm not saying that you said it was not going to be an issue but I'm putting it out there because it is going to be an issue. You mention baby faced and 22. I'm in my 50's and people in their 30's are all baby faced to me when it comes to my hard earned savings. People your age make it. People my age make it. People of all ages make it. But youth is not an asset in this business.

Having practiced law for 5 years is a huge advantage IF you have a network of people with assets who will see you as a financial advisor right out of the gate. I'm a career changer too and I was a competent professional (sales professional) in technical sales. No one that I knew in my former life is, so far, seeing me as an FA. I think they will someday but someday does me zero good for hurdles today.

I'm not trying to be negative and I'm not trying to persuade you to not jump in. My point is this: everyone, including myself, thinks that they know what to expect. People often believe that they sold in the course of their last job even if they were selling themselves as a lawyer for instance. Unless you have done this exact job you are clueless as to what you are going to face.

I wish you well and I wish you tremendous success. Having a JD can be a tremendous asset. But, I'm pretty sure that you, like me and everyone else I've ever known, has no real idea what is in store.

Please keep us informed, and best wishes to you.

Good post, ZwingDing.

FADavo, Good luck and let us know your progress.

[quote=ZwingDing]

[quote=Paradigm]So is it safe to say that any PMD who fails the Series 7 will not be allowed to retest?[/quote]

It's up to the local manager. If he/she/it decides you are worth it they have to convince their boss and their bosses of the same thing. The more typical thing, I think, is if you do not pass you 7 your stuff is sent home to you in a box. It's kind of way to show you MIGHT be a good hire.

I'm not saying it is right or wrong, but it's what I hear. I know that a person in an office of which I have personal knowledge did not pass and was not allowed back in the building.

[/quote]

Unless you score within 1-2 points of passing AND have a huge extenuating circumstance (house burned down, illness, death in family, etc.), you are done if you cannot pass the Series 7 the first time at ML.

Good luck

/

A few questions on ML PMD--

Are PC's/NNH/NNA cumulative or Trailing 12 numbers?

NNA = Net New Annuitized (ie: fee based only counts) or Net New Assets?  Also, do annuities/C shares/ etc count towards Annutized?

How long is pre-production?

sorry for duping -- wasn't sure which forum was best for this post

FB:

I'm copying my response from the other forum.  Great question but in the future, you may get better responses by starting a new topic than piggybacking on an old thread.  These forums used to be a lot more active but some bad apples (that RR finally banned) chased a lot of posters away. 

I would check out the Rookies Forum on this site, there are some good threads about ML PMD.

I don't have the Plan in front of me but I believe the following answers are correct:

1. Hurdles are all cumulative.
2. NNA is Net New Annuitized. Currently, ML is counting annuities and C shares as annuitized for the PMD program. However, this may change because starting this year on the FA side, they no longer count them. Only Managed Products are considered annuitized assets. This is something that Bank of America did with their program before Merrill (and they only paid 22%-28% on those annuity and C share trails; yes, that was painful).
3. Pre-production varies based on the tests needed and when you start, generally a month or two. Then you have an LOS "0" for 3 months before the hurdles start counting (and you become Length of Service "1" for the first month).

BACFA --

Thank you for your prompt and helpful response!  So please correct me if I am wrong, but from your post, I gather that after a month of pre-production (if you are full licensed), you have a three month head start to hit your hurdles?  If you generate any PC's during the three months at LOS "0", are you paid out on them?

I am not absolutely sure on the answer but because all the goals are cumulative, I don't think they will pay you until you finish your first quarter, in essence, finishing LOS 3.  Your LOS "0" production would go towards those hurdles.  

The PMD grid is not a traditional grid.  Kind of long to explain here but Merrill factors in previous quarterly bonuses and the salary (forgiveable draw) for the monthly incentive check.

By any chance do you have a comp guide you could attach? (if it is compliant that is -- something they give to candidates)

[quote=BACFA]

[quote=FB 41]

BACFA --

Thank you for your prompt and helpful response!  So please correct me if I am wrong, but from your post, I gather that after a month of pre-production (if you are full licensed), you have a three month head start to hit your hurdles? 

Yes.

If you generate any PC's during the three months at LOS "0", are you paid out on them?

No. The income you receive in the PMD program is not a salary. It is a non-recoverable draw against commissions.

[/quote]

[quote=FADavo]

[quote=BACFA]

I am not absolutely sure on the answer but because all the goals are cumulative, I don't think they will pay you until you finish your first quarter, in essence, finishing LOS 3.  Your LOS "0" production would go towards those hurdles.  

The PMD grid is not a traditional grid.  Kind of long to explain here but Merrill factors in previous quarterly bonuses and the salary (forgiveable draw) for the monthly incentive check.

[/quote]

The "grid" is super low paying but that is because the compensation is really structured completely differently while in the program.

First, you get your salary.  Then you have quarterly bonuses based on meeting the quarterly hurdle numbers.  You only have to MEET or exceed the numbers to get the bonus.  The bonus is 15% of production.  I addition, you get an annual bonus (so a total of 5 bonus possibilities a year) if you meet the annual numbers.  I cannot remember off hand what the annual bonus is, but its pretty good.  

What this does is sort of kill your chances at making some huge payday month because your % is low (15), but you are also making a salary that is probably bumping you over what you would be making on a 40% grid anyway, at least for the first 2 years.  

I did the numbers and at, say, a 50K salary, You can make about 22% (of salary) bonus by LOS 12, 60% bonus (over 80K) by LOS 24 and over 6 figures total by LOS 36 if you just hit the hurdles.  You can make more if you are killing the hurdles, specifically the PCs.  

If you start the interview process, they will usually tell you this.  I had a 45 minute conversation with one of the phone interview people about scenarios and what I would make if "so and so" happened.  She gave me exact numbers.

I have told everyone I have spoken with so far that I found the ML interview process refreshing in that they really didn't blow a bunch of smoke.  They tell you its hard, they tell you what people struggle with and they tell you why people fail (and that they do, in fact, fail).  

[/quote]

It is difficult to make monthly commissions. I don't know anyone who is getting them. It is less difficult to make the quarterly bonus.

Ok, I think I'm on the same page, but just to confirm.  Say you have a $60K Annual Salary, thus $5k per month in salary.  If you exceed your monthly salary in commissions (say you produce $6k in PC's in a given month), then you take home the difference after payout (at 15% in the case it would be $150).  So total monthly pre-tax income in this case is $5k + $150 = $5,150.  In addition, you get a bonus if you exceed your goals by the end of any given quarter and a stock bonus if you exceed your annual goals by the end of LOS month 12, 24, and 36.

In addition, with a three month head start at LOS= "0", you have more time to generate PC's from fee based accounts, since as we know, they are great for a recurring revenue stream, but don't pay as much up front as say an A share or Annuity or Hard Dollar Commission. 

If any of this is incorrect, please let me know.  Also, does salary end at month 24 or 36 (at which point payout goes from 15% to 40%?. Thanks for your help.

Ok, I think I'm on the same page, but just to confirm.  Say you have a $60K Annual Salary, thus $5k per month in salary.  If you exceed your monthly salary in commissions (say you produce $6k in PC's in a given month), then you take home the difference after payout (at 15% in the case it would be $150).  So total monthly pre-tax income in this case is $5k + $150 = $5,150.  In addition, you get a bonus if you exceed your goals by the end of any given quarter and a stock bonus if you exceed your annual goals by the end of LOS month 12, 24, and 36.

In addition, with a three month head start at LOS= "0", you have more time to generate PC's from fee based accounts, since as we know, they are great for a recurring revenue stream, but don't pay as much up front as say an A share or Annuity or Hard Dollar Commission. 

If any of this is incorrect, please let me know.  Also, does salary end at month 24 or 36 (at which point payout goes from 15% to 40%?). Thanks for your help.

As 

Monthly incentives are based on 47% payout.

That sounds a lot more reasonable.  However your net commissions have to exceed your monthly salary in order for you to take the difference, not gross?  I thought the whole point of trainee salary was to give you enough to support yourself while also rewarding you for outperforming your goals?  If you are on 5k salary per month, and you produce 6k, the firm still takes 100% payout on the first 5k, so I would think that there would be a normal payout grid for the remainder, similar to the comp structure that the Veteran FA's are on.  I could be wrong, but I can't imagine they would expect 25-30k Monthly Gross from a trainee in his/her first year. 

[quote=BACFA]

Monthly incentives are based on 47% payout.

[/quote]

My comments are nested within the previous post below:

[quote=FADavo]

As stated, the monthly payout is really difficult to hit because of how you hit the grid.  I think you hit the grid at 15% or maybe 20% regardless of how well you are doing during the PMD program.  If you do the numbers, that means you would have to have between a 25 and 35 K month of PCs (depending on what the percentage is) just to exceed that 5K in salary.  That is obviously pretty difficult when you are just starting on the building of your book, as that is 300K to 420K annualized production, or essentially the production of a well trailed 40-50MM book.  Its not impossible, but its pretty damn unlikely at least until LOS 2-3.  

The grid is 47% for the first two years and then drops to 43% and then to 38% at graduation (or something close to that; everytime I write about the PMD program, I don't have the Program Guide next to me!).  For the monthly incentive calculation:  1. Calculate your monthly PC's on the 47% grid.  2. Subtract your monthly salary. 3. Subtract 1/3 of the previous quarter's bonus.  So for a scenario with $20,000 PCs in a month, a $5,000 monthly salary, and 1/3 quarterly bonus of $1,000: $20,000 X 47%-$5000-$1000 = $3600 ontop of the $5K Salary.

(Something that the Guide doesn't cover is whether you still get the Monthly Incentive if you didn't qualify for last quarter's bonus.)

The quarterly bonuses are based on simply meeting the hurdles, and you get a 15% payout of production ON TOP of your salary.  These are much easier to hit because, well, if you are not hitting them, you probably wont be around long.  

Yes, quarterly is much easier hit.  You qualify just by hiting the hurdles. Monthly is harder becasue you have make at least your salary before any of it pays out.

as far as the salary goes, it starts to trail off after LOS 12, BUT LOS is actually about 19 months after you start.  I think what they told me was that they take your salary and "smooth" a reduction to 36K by the end of LOS 36 (end of PMD program).  so if you are making 50K, then they would reduce your salary starting the first quarter of year 2 of production by $1500 annualized.  The annualized is key because you will not really see that large a reduction in what you are actually paid for a bit.  I have not done the numbers but I am guessing there is a meeting point some time in late year 2 and early year 3 at which time your "average" grid production starts to exceed your salary.

I didn't delve too deeply into this section.  The way I read it (and again, sorry no guide in front of me), is that they calculate the reduction by yourannual salary and subtracting $35,000.  You will lose a third of that difference after each year.  Not sure how they break that down monthly but I would assume your monthly check drops immediately.  For example, annual salary is $50,000.  $50,000-$35,000=$15,000.  You lose a third of that each year, so 2nd year salary will be $50,000-$5,000 =  $45,000. Third year is down to $40,000.  Fourth is all commissions.

As stated, the recruiters will map this for you.  The lady I spoke with mapped pay for me over the phone.  I asked what i would make if I simply met the minimum hurdles.  It was 20% more than salary by LOS 12, 60% by LOS 24 and a bit over 100% by LOS 36.  I do not think there is a scenario in which you are making less than 6 figures by LOS 36 and are still employed by ML.  I could be wrong about this, but I did not see how it would work (numbers wise).  

That math doesn't sound right at all.  If first year hurdle is $40,000, then the quarterly bonus of 15% is $6,000. Your salary would have to be a lowly $30,000 for that to be a "20%" bonus.   In fact, the third year annual PC requirement is $190,000 (not cumulative and for the middle salary earners). $190,000 X 15% = $28,500.  That is nowhere near 100% of your salary and certainly won't put anyone over six figures.

Of the rare group of successful PMDs that weren't brought in by their fathers, I doubt any of them are over six figures in the fourth year.  

The whole idea is that they want to "smooth" your earnings so you are not sinking and soaring from month to month.  So while they will prop you up while you are starting, they are also not going to allow you to stick your hand in the cookie jar if you have some anomaly month in which you produce like a madman.  

To make up for the lost salary in the fourth year, a PMD will need at least an extra $100,000 in PCs ($100,000 X 38%) to keep their income steady.  In fact, most PMD's see their income drop in the fourth year.

[/quote]

/

My responses nested below in bold:

[quote=FADavo]

I think the quarterly bonus is 15% of your cumulative production.  If it wasn't then no one would stay in the PMD past 12-15 months.  Think about it.  Why would you stay in if you can produce 10K a month after 15 months and make more money.  10K is about what you would have to be doing (more like 15 by LOS 14).  at a 42% grid payout, thats 4200 or 6300.  You would just graduate out or take the grid pay instead.  

The 15% quarterly bonus is not based on cumulative production.  It is based only on the PC's generated during the quarter (either new PC's or recurring revenue).  We'll use your hypothesis and for simplicity, look at one month's pay.  At $10k PC's, the quarterly bonus for the month is $1500. Add your base salary for the month, say $5000. Total pay for that month in the PMD  program is now equal to $6500.  Recalculate on the FA grid and you have to factor in what the recurring revenue is and the chance that your transactional PCs are lower than the $10k.  In the early LOS, it's almost impossible  that a PMD can overcome the salary bump. However, if a PMD is consistly overshooting their  hurdles and the FA grid is higher, they will allow you to graduate early.  I know that happened for a Manhattan PMD.  However, it's unlikely because the PMD Monthly Incentive grid (47%) is already higher than most of the FA Grid.

Using your mistaken hypothesis again about cumulative PCs, let's say a PMD finishes LOS 24 at $250K and stops completely.  For every Quarterly Bonus=250K x 15% = $37.5k. So for the year it would be 4 x $37.5 = $150k! Plus his salary.  So this 3rd year PMD would be making close to $200K?  That is incorrect.

And if you are saying you 'can't" do as much, then your second statement that the pay of a 4 or 5 year person drops dramatically makes absolutely no sense.

You said it yourself that you have to be doing 190K in your third year (just the annual) to simply graduate.  Okay, so say you only MODESTLY grow the next year, at a level that they would consider unacceptable - 75K more, for a total of 265K in production.  Even at a low 38% payout and NO bonuses for production you still make over 100K.  So how could it be that the production in year three plus bonuses "certainly won't put anyone over six figures" but also that "income drops in the fourth year" when its not mathematically demonstrable that both could happen.  This two thoughts are diametrically opposed to each other.  

1. You are still working under the assumption that the hurdles can be done without splitting revenue with senior FA's or some other revenue sharing agreement.  You are correct that Year 4 will be higher if a PMD does it on their own and does not enter into any arrangements.  But as this forum and many PMDs have attested, it is virtually impossible to achieve the hurdles alone and I based my statements on that reality.

2. PMD 3rd year: Salary = $45k, Annual Revenue = $190k (based on the middle tier), Total Quarterly Bonus (correctly calculated based only on the annual revenue of $190K) = $28.5k.  Total income (again leaving out Monthly Incentives) for the 3rd year is $45k + $28.5k = $73.5K.  If the PMD gets to keep all his PCs (no help from anybody), then you are correct that the 4th year pay is higher.  But in real-life, we do not see that happening. 

To have a job at ML, you need to be doing 200K by year 3 to meet the hurdles.  At that pace, you are easily doing 275 year 4 which, even with no bonus %, is going to pay you out in excess of 6 figures.  So, either statement 1 or statement 2 is incorrect.  You are either capable of making 6 figures in year 3 which then could subsequently drop or you are not capable of making it in year three and statement 2 about "lower year 4 payout" is just not correct.    

Whether or not people "can" be successful at those numbers is not for debate.  My point is that if you want to work at ML, these are the numbers you will produce or you simply will not be there.  

I think you are missing the nuances of a successful PMD.  Your belief is that a PMD can go into the program, sit at a phone, and hit all the hurdles alone.  Yes, for the very rare and well connected PMD, that can happen.  Or if your Dad and Mom are Merrill FAs and are giving you their book.  But outside of that, the only PMDs that are making it through the hurdles are partnered.  And in the partnerships, the senior FA is not giving up their book or running semimars for free. 

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