Hiring Process at Smith Barney

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Jun 26, 2005 9:24 pm

What is the hiring process at Smith Barney?  Tests, interviews, number of interviews and with whom, etc.  What is the percentage of people actually hired?  Is it as selective as they say?

Jun 27, 2005 6:08 am
datongdave:

What is the hiring process at Smith
Barney?  Tests, interviews, number of interviews and with whom,
etc.  What is the percentage of people actually hired?  Is it
as selective as they say?





Seeing as SSB took on 150 or so new branches on Friday I'd say you're
going to find their door closed for awhile as they go about
assimilating that group, laying off and all the other joys that
accompany the mergers in the street.

Jun 28, 2005 10:55 pm

Any word on how the Legg Mason folks are taking the news?  Are
they eager to join Citigroup/Smith Barney?  Or is it a field day
for recruiters?



I've always despised the notion that you can "buy" people through
acquisition.  I know sometimes people aren't happy about being
acquired and leave.  I'm just wondering what the situation is in
this case.



Any predictions on how this will work out?  Good for Legg? 
Legg had to pony up over $1 billion in cash and stock in addition to
their brokers.  I'd have to imagine that over time money
management will become more commoditized and that'll squeeze
margins. 

Jun 28, 2005 11:47 pm

Inq,


As an LM broker, I now consider myself a down card. Chip has been waiting to play this hand for sometime, so no great shock. I can say for the contingent that I have spoken to, many are dissapointed with the merger - mostly the top producers. The retention package for 1mm+ is 40% (1/2 cash/ 1/2 R. stock) - vests in 4 years. But the kicker is that they are vesting deferred comp on closing - so a good portion of the bonus will go to pay uncle sam!!


I think a fair number of brokers are looking at this as an opportunity to find out their true market value. I am by no means in the upper echelon, but I still understand the premium I could command. And the chance to "streamline" one's book......something I think all of us consider to be beneficial. Look, any broker worth his salt knows that they are the draw for their clients, not the firm. I feel to let the corporation dictate the best platform for my clients would be a great disservice. I am doing my due dilligence, as are most.


My summary - SB is a reputable firm with branding and technology in it's favor, but I don't think that plus a paltry check will be enough to retain more than 60-70% That might just break this deal as the Big C  looking to have contracts in place "shortly" will force some to jump ship before the dec. 1 close.

Jun 29, 2005 10:18 am
LMBARGINCHIP:

Inq,


As an LM broker, I now consider myself a down card. Chip has been
waiting to play this hand for sometime, so no great shock. I can say
for the contingent that I have spoken to, many are dissapointed with
the merger - mostly the top producers. The retention package for
1mm+ is 40% (1/2 cash/ 1/2 R. stock) - vests in 4 years. But the kicker
is that they are vesting deferred comp on closing - so a good portion
of the bonus will go to pay uncle sam!!


I think a fair number of brokers are looking at this as an
opportunity to find out their true market value. I am by no means in
the upper echelon, but I still understand the premium I could command.
And the chance to "streamline" one's book......something I think
all of us consider to be beneficial. Look, any broker worth his salt knows that they are the draw for their clients, not the firm.
I feel to let the corporation dictate the best platform for my clients
would be a great disservice. I am doing my due dilligence, as are most.


My summary - SB is a reputable firm with branding and technology in
it's favor, but I don't think that plus a paltry check will be enough
to retain more than 60-70% That might just break this deal as the Big
C  looking to have contracts in place "shortly" will force
some to jump ship before the dec. 1 close.





There is not a broker alive who doesn't believe that.  To demonstrate the validity of it ask yourself a simple question.



"If I were to fall over dead this afternoon would all of my clients close their accounts?"



If you conclude that they would keep doing business with somebody you
have to conclude that they are open to entertaining the thought of
starting a new relationship with somebody as Smith Barney.



Before anybody gets all blown up with their own self importance they should imagine what the client is thinking.



They are told that their account is going to become a Smith Barney account, a firm they know to be top drawer.



Next their Legg broker is attempting to persuade them to switch their
account to (say) Wachovia Securities (big in the same markets
where  you find a lot of Legg offices and agressively recruiting
for their branches and their independent efforts).



Does Mr. Johnson decide, "You know what?  I like you as a person,
but all this turmoil has made me wonder if I need a broker at
all.  I think what I'm going to do is just leave my portfolio at
Smith Barney, after all it really takes care of itself anyway......."



Are you going to say, "But Mr. Johnson, every year you pay a management
fee and I won't get that fee if you don't move your account to
Wachovia?"



Not much of a motivator there, is it?

Jun 29, 2005 12:03 pm

Put, you're obviously still stuck back in the old days when you were once producing.  Back then in the days of brokers selling the stock/option/bond idea of the day over the phone for a commission, the firm was more important to the client because strong relationship hadn't been built.  So, Joe Blow Rep leaves Merrill, etc. and the client was just as happy to get the next broker that takes his place. 


You don't understand that, assuming a rep has built a good relationship with his/her clients, clients view their relationship as being with the rep not the firm.  Quality reps retain their clients almost no matter where they choose to go. 

Jun 29, 2005 12:12 pm

"If I were to fall over dead this afternoon would all of my clients close their accounts?"


If this were the case I would certainly agree with you. I am not claiming, as you seem to have indicated that LM brokers have any special powers over their clients. That being said, I have found that beyond the personal relationships that most have with their top clients, there is also a large number (quite a few former SB clients I might add) that were drawn to Legg Mason not on the pretense of Bill Miller doubling their investments, but on the credentials and ability of the advisor.


When you are working with a firm a tenth the size of the wirehouses out there, you very rarely find that a "top drawer" name is an important factor in the decision of clients to move their accounts. It is more often then not (dare I say) the individual advisor that they are putting their faith in.


That fact coupled with prudent invetment advice I feel makes for very sticky clients.


And as someone involved in this "turmoil" as you have so eloquently put it, the overwhelming response when I ask my clients their thoughts and feelings on the matter is - I will stay with you (SB or otherwise).

Jun 29, 2005 3:56 pm
Duke#1:

Put, you're obviously still stuck back in the old
days when you were once producing.  Back then in the days of
brokers selling the stock/option/bond idea of the day over the phone
for a commission, the firm was more important to the client because
strong relationship hadn't been built.  So, Joe Blow Rep leaves
Merrill, etc. and the client was just as happy to get the
next broker that takes his place. 


You don't understand that, assuming a rep has built a good
relationship with his/her clients, clients view their relationship as
being with the rep not the firm.  Quality reps retain their
clients almost no matter where they choose to go. 





You really do have the temerity to state that the broker client
relationship is stronger today, when all you have to do is explain
mutual funds than it was in the days when clients would actually seek
to have multiple brokers within the same office because of individual
expertise?

Jun 29, 2005 4:11 pm
LMBARGINCHIP:

And as someone involved in this "turmoil" as
you have so eloquently put it, the overwhelming response when
I ask my clients their thoughts and feelings on the matter
is - I will stay with you (SB or otherwise).





Do you suppose that Smith Barneyis preparing dynamite pieces designed
to convince Legg customers that they should be delighted that they now
have an account with Smith Barney--and that Smith Barney has a cadre of
highly educated, highly experienced, local representatives to service
their needs?



Local Legg branch managers are being offered packages designed to
reward them handsomly if they keep their branch's client base in tact.
The truth be known it doesn't matter if you leave--what is important is
that your clients don't leave.



Your book will be given to EXPERIENCED Smith Barney brokers who will
make calls that begin, "Since we had to let Jim go I want to let you
know that I am a specialist in (whatever they have) and Smith Barney is
a premier firm.  I have no doubt you will find both the firm and
me to be very responsive to your needs."



"Oh, is that right--you signed papers to transfer your account to
Wachovia?  I'm sorry to hear that--if you'd like I can countermand
that transfer to give you some time to get to know me.  Naturally
you'd be free to transfer it whenever you care to, but I sure hope
you'll give me a chance to win your confidence.  Had we not been
forced to let Jim go it would have been impossible for me to open an
account with you, but that is not the case now.......when could I shake
your hand and let you take a measure of me?"



A broker's own mother can be persuaded to not act in haste--and wonder what was meant by "We had to let Jim go....."

Jun 29, 2005 5:31 pm

Put,


I guess life in Chile is pretty much a vacuum, huh. A perfect storm of circumstances all converging on a brokers business at once. My intention is not to get sucked into a pissing match with you, but if I must....


In MY perfect world, (I like to call it reality) there are no predestined outcomes, nor predetermined paths. I understand, as do any fully functioning people on this forum that there are hurdles to be overcome in any business endevour. Success by any measure entails a certain "acceptable loss", be it financial or otherwise.


Take the transactional broker who plateaus in their business at 350K. In order to get to the next level they make a decision to focus their efforts on building in some fee based revenue. They understand going in that there is a high probibility that their gross will drop (2% comm vs. 1-1.5% fee) initially, but that the time that they free up due to less transactions will allow more time for prospecting new business, and therefore result in greater scalability. That drop in gross during the transition would represent an acceptable loss.


That being said individual risk/reward comparisons have to be made in any transition. What loss is acceptable? How long will it take to recoup that loss? What are the rewards? Unfotunately with no efficient frontier for transitioning one's business, one needs to rely on their instinct, experience, and statistics to guide them.


Listen, you and I both know that there is no perfect set of circumstances, and that you playing devil's advocate is just your way of trying to stand out. I don't think anyone dissagrees that any broker making a move is risking some of their relationships, but only the ones that were already at risk or were never there. 


So, I guess while I wait another 4hours for PUT to think up some response based on non-contextual points within this post, I will once again answer INQ's question: many are displeased, and are looking, and my bet would be for 60-70% retention.


And oh yeah - leave my mother out of this!

Jun 29, 2005 6:01 pm

"Listen, you and I both know that there is no perfect set of circumstances, and that you playing devil's advocate is just your way of trying to stand out."


I think Put attempts to alienate every new forum member so that he can continue his battles... What a life the guy must lead...For such an important cog in a "major NY wirehouse", he sure does have a lot of time to post during the day... And in the evenings watch out- I can envision him running through the subway to get home, pound a reuben sandwich from the $hitty neigborhood deli, and giggle with glee as he assumes his "throne" in front of his computer... What a life..


Jun 29, 2005 7:05 pm
blarmston:

"Listen, you and I both know that there is no
perfect set of circumstances, and that you playing devil's advocate is
just your way of trying to stand out."


I think Put attempts to alienate every new forum member so that he
can continue his battles... What a life the guy must lead...For such an
important cog in a "major NY wirehouse", he sure does have a lot of
time to post during the day... And in the evenings watch out- I can
envision him running through the subway to get home, pound a reuben
sandwich from the $hitty neigborhood deli, and giggle with glee as he
assumes his "throne" in front of his computer... What a life..





Nah, one of the early lesssons I learned--perhaps the earliest--about
moving around in NYC was to not run for the subway.  Well, I will
rush a bit if I'm at the turnstile and a train is sitting there--but
normally I'm very laid back and just wait till the next one.



Actually what experienced New Yorkers do is learn to know how to time
the trains.  You can usually hear them in the tunnels--so what you
do is stay on the street where it's cool and wait till the last second
to go down there among the teeming masses.



Thankfully where I get on and off I don't have to walk very far at all
from the foot of the steps to the turnstiles--thirty seconds or so.



As for the Ruben sandwich--why in the world would a guy who has a best
friend for a wife need to "pound a Ruben" when there is probably a good
old fashioned homemade meal waiting?



Another joy of living where we do is that Putette can prepare a great
meal on Wednesday morning. Put it in the refrigerator and go to a
matinee--just walk up to the TKTS booth and buy whatever has the best
seat, no need to be focused on what you're going to see when you've
seen them all.



Anyway she can go to a 2 PM curtain and come home during the
intermission to start dinner--they call the neighborhood Hell's Kitchen
or Clinton.



Finally the throne image--again wrong.  Poor Blarmston, always wrong.



I've got a home network and sit on the balcony sipping an adult
beverage while I watch the sun set over the Hudson to my left--and Sue
Simmons telling me what's going on in the world to my right.



It's a wonderful place to live if you have a life.



Go ahead, mutter to yourself, "It sounds like he's got a hell of a life
style.  I think it would be great to live in Manhattan for a few
years."

Jun 29, 2005 7:13 pm

Put,


If you honestly had a life, you wouldn't spend all of it posting on a forum. You have posted almost 700 messages since 4/08/04. It appears that this forum is your life. Why would anyone believe the crap you post when you seem to have so much free time. My guess your unemployed. No one with a job would have the time to waste that you do!

Jun 29, 2005 7:17 pm

Correction, should be 4/08/05.

Jun 29, 2005 11:35 pm

I have to step back for a minute and thank Put for his input on each (and it seems every) thread in this forum. Without your needling, we would not be forced to look at all facets of our respective issues. I appreciate your cander in replying to the threads in the manner in which we've come to expect.


That being said I am not an MBA, in fact I am the antithisis of all that you seem to hold sacred about being in this business. I have seen over the last six years many ivy leaguers and blue bloods sit and stare at their screens paralyzed by the fact that they cannot find the answers to their clients needs in a text book. So just as I apprecite your education and wisdom, I am sure that you can see the value of an independant thinker that may not have been born with a silver spoon wedged squarely in their tail.


Oh yeah, mom says hi!

Jun 30, 2005 6:42 am
Coag:

Put,


If you honestly had a life, you wouldn't spend all of it posting on
a forum. You have posted almost 700 messages since 4/08/04. It appears
that this forum is your life. Why would anyone believe the crap
you post when you seem to have so much free time. My guess your
unemployed. No one with a job would have the time to waste that you do!





The other side of the coin is that I am so well rounded that I am able
to contribute so much--it's not my fault that you're so inexperienced
that you find yourself with  nothing to add.



The profile button tells you a daily average of postings--mine is
between 8 and 9.  That is per day--hardly an obsession, not really
much of a contribution considering all the questions that are raised
that I know the answer to.



Again, it's not my fault that so many of you are not bright enough--or
don't have enough experience--to have opinions that you think are
worthwhile.




Jun 30, 2005 7:05 am
LMBARGINCHIP:

I have to step back for a minute and thank Put
for his input on each (and it seems every) thread in this forum.
Without your needling, we would not be forced to look at all facets of
our respective issues. I appreciate your cander in replying to the
threads in the manner in which we've come to expect.


That being said I am not an MBA, in fact I am the antithisis of all
that you seem to hold sacred about being in this business. I have seen
over the last six years many ivy leaguers and blue bloods sit and stare
at their screens paralyzed by the fact that they cannot find the
answers to their clients needs in a text book. So just as I apprecite
your education and wisdom, I am sure that you can see the value of an
independant thinker that may not have been born with a silver spoon
wedged squarely in their tail.


Oh yeah, mom says hi!





Do you think you would be even better if you were an MBA?  Do you
think your clients probably assume that you have an advanced education?



Sit and stare at the machine--God that conjures up memories of doing it
myself and watching scores of others do it.  It's a phenomenan
that anybody worth their salt has experienced.  If you have never
done it, you don't have your head on straight.



A few weeks ago I spent a couple of hours with a senior guy in Human
Resources.  He was telling several of us that the firm is actually
seeking to hire people who are not all that bright.



The argument that all that is expected are worker bees to go out and
gather assets is true.  He actually said that the reason for the
IQ tests is to find people of average intelligence rather than above
average intelligence.



The kind of guy or gal who is aware that something happened to a young
girl on an island somewhere, but is far more interested in whether
Barry Bonds will come back or if Brad Pitt and Jennifer Anniston still
love each other.



Such individuals can be taught to explain mutual funds to people, and
with luck they will grasp that if the stock market tanks the mutual
fund will too.  There is no way they could explain why the market
tanked--Alan Greenspan?  I think he's that sidekick on The Daily
Show, right?



In any case, it's scary when an industry that used to pride itself on
the high quality of its staff has actually decided that the ideal
customer's man is a relatively stupid man or woman who has the "gift of
gab" and little more.



Two years ago one of my brother's nieces graduated from that huge
school in Austin, TX.  A few weeks ago I was in Texas to celebrate
my father's 85th b'day and she was at the table, all good looking and
perky in spite of the fact that she has yet to be able to find a job
other than waiting tables in a bar.



Her grandfather, my Dad, cut right to the chase and told her, "Go to
work for the government, they'll like the fact that you can read and
make you a manager."



You know, he's right. As the country has dumbed down in its frenzied
attempt to create equality and diversity those with what were once
known as "basic skills" are now in great demand.



Within the last few days somebody on this board indicated that the
smart kids of today--they'er fewer but still there--are able to get
jobs that are far more interesting than explaining mutual funds to
people.



As Scropio said the other day, "It's not rocket science" and it damned sure isn't.



Apparently the shingle is out.  "Wanted--mediocre individuals to
explain mutual funds.  Unlimited potential income.  Bright
people need not apply."



Go look in the mirror.  Do you see somebody you think is really very bright?

Jun 30, 2005 8:30 am
LMBARGINCHIP:





The retention package for 1mm+ is 40% (1/2 cash/ 1/2 R. stock) -
vests in 4 years. But the kicker is that they are vesting deferred comp
on closing - so a good portion of the bonus will go to pay uncle sam!!

I think a fair number of brokers are looking at this as an opportunity to find out their true market value. 


My summary - SB is a reputable firm with branding and technology in
it's favor, but I don't think that plus a paltry check will be enough
to retain more than 60-70% That might just break this deal as the Big
C  looking to have contracts in place "shortly" will force
some to jump ship before the dec. 1 close.


This is the way I look at it:  If Legg Mason reps wanted to
work for Smith Barney they would already be there.  That retention
package is PATHETIC!  If you quit on your own and went to Smith
Barney before the acquisition was announced you would have gotten a lot
more money.  A LOT more.  (Maybe it's not too late!)


The fact is Legg reps ARE joining a new firm.  New
culture.  New rules.  New technology (which may or may not be
a good thing).  Now, if you folks are happy to join Smith Barney,
that's fine.  But if you would be just as happy joining another
firm where you would get a LOT MORE MONEY, then you should
probably go to another firm.  That makes perfect economic sense.


As I said, I've never liked the notion of "buying people".  I
don't.  I can see acquisition as a sound strategy if there is no
presence in a given market and you want to buy some branches to create
a presence from which to build upon.  A springboard, if you
will.  Then if your reps leave, you've got the infrastructure and
can replace them.


But this is clearly a case of buying people.  Smith Barney
probably already has branches most everywhere Legg does.  How can
they possibly think that their PUNY retention package is going to
persuade anyone to stay?


Seriously, if what you said is the retention package, 40%, I'd be
out of there so fast all you would see is a blur.  That's a
terrible package in this highly competitive market.  Absolutely
terrible.  (Do those clowns in the executive suite think that
package impresses anyone?)


As for what Put said, I don't think any clients are going to be
terribly impressed that they are now with Smith Barney.  If that
were the case, they would ALREADY be with Smith Barney.


Even small regionals have $1 million and higher producers.  As
of now, the rep still has power over the clients.  The rep brings
the clients in and keeps them in.  But I think that will change
over time.


Good luck and feel free to keep us posted, LMBARGINCHIP.

Jun 30, 2005 12:36 pm
Put Trader:
Coag:

Put,


If you honestly had a life, you wouldn't spend all of it posting on a forum. You have posted almost 700 messages since 4/08/04. It appears that this forum is your life. Why would anyone believe the crap you post when you seem to have so much free time. My guess your unemployed. No one with a job would have the time to waste that you do!




The other side of the coin is that I am so well rounded that I am able to contribute so much--it's not my fault that you're so inexperienced that you find yourself with  nothing to add.

The profile button tells you a daily average of postings--mine is between 8 and 9.  That is per day--hardly an obsession, not really much of a contribution considering all the questions that are raised that I know the answer to.

Again, it's not my fault that so many of you are not bright enough--or don't have enough experience--to have opinions that you think are worthwhile.



Aside:(Does anyone else feel like this guy kicks the dog when his wife isn't looking?)


Put,


I have to applaud the tenacity with which you guard your convictions, you might make a pretty-good broker some day.



Jun 30, 2005 1:30 pm
LMBARGINCHIP:

Put,


I have to applaud the tenacity with which you guard your convictions, you might make a pretty-good broker some day.


Been there, done that, still have the T-Shirt.


I see that you too have been unable to keep up with the discussion
and have to resort to the age old approach of attempting to minimize
the king.


It's OK, my shoulders are broad and my intellect keen.  I am fully capable of dealing with all of you at once.


I write for my own amusement and for the benefit of the dozens of
people who write to me in the background telling me that they enjoy how
I routinely humiliate the rest of you.