Merill Lynch POA Compensation

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Apr 1, 2007 4:45 pm

I am currently at Smith Barney (>1yr experience) and am considering a move to Merrill. Can anyone tell me about the POA compensation program?


Any ideas on salary? (I am fully licensed, 7,63,65,3, insurance)


What are the first year AUM and/or gross requirements?


What are the bonuses for reaching those levels?


Cash and/or stock bonuses?


Apr 1, 2007 9:51 pm

Why do you care about salary. Just curious? Everything I have read on these boards describes Smith Barney as excellent place to start your career. It seems the general consensus is that those concerned with salaries should probably be choosing a different career path. I have also gathered that if you are currently worried about meeting the AUM requirements at your current firm then a switch to Merrill Lynch would be anything but easier. When I interviewed with them there AUM goals for first year of production were between 9mm-13mm. This obviously depends on your location but they were the highest I encountered.

Apr 1, 2007 11:01 pm

If you are considering changes firms after such a short time you best have a VERY good reason for doing so, and you better make your time at Merrill successful.  If you find it necessary to make another change after that this one will NOT look good on your resume.

Not meaning to be overly negative, just realistic.  Think this through carefully and take a long-term view.

Apr 1, 2007 11:24 pm
joedabrkr:

If you are considering changes firms after such a short time you best have a VERY good reason for doing so, and you better make your time at Merrill successful.  If you find it necessary to make another change after that this one will NOT look good on your resume.

Not meaning to be overly negative, just realistic.  Think this through carefully and take a long-term view.


A guy who is still asking about salaries won't get in with ML. Why would they assume SB's problem?

Apr 2, 2007 12:28 am

The reason I am trying to find out this information gents is b/c I am trying to find out if this guy from ML who is trying to recruit me there is really serious or just blowing smoke up my ass.


My gross production after 9 months is $42M, and he's telling me if I have $50M production after 12 months, I get $30M in cash and $120M in ML stock. This sounds almost too good to be true, as our bonuses at SB are not even close to anything like that, (only $8M cash, $15M stock, and much higher production ($70M) thresholds.)


The reason I was asking about salary is b/c he said that mine at ML would be significantly increased from what I was making now since they wouldn't have to pay for my training, licensing, etc.


All I know is that most of the time, when something seems too good to be true, it mostly is. So I was just trying to get some reference from this board - which I just happened to stumble upon today and joined.


Hence, any feedback from some members who actually can tell me relevant information pertaining to my situation would be greatly appreciated.

Apr 2, 2007 12:40 am
rjavy:

The reason I am trying to find out this information gents is b/c I am trying to find out if this guy from ML who is trying to recruit me there is really serious or just blowing smoke up my ass.


My gross production after 9 months is $42M, and he's telling me if I have $50M production after 12 months, I get $30M in cash and $120M in ML stock. This sounds almost too good to be true, as our bonuses at SB are not even close to anything like that, (only $8M cash, $15M stock, and much higher production ($70M) thresholds.)


The reason I was asking about salary is b/c he said that mine at ML would be significantly increased from what I was making now since they wouldn't have to pay for my training, licensing, etc.


All I know is that most of the time, when something seems too good to be true, it mostly is. So I was just trying to get some reference from this board - which I just happened to stumble upon today and joined.


Hence, any feedback from some members who actually can tell me relevant information pertaining to my situation would be greatly appreciated.



Some firms have programs out there where they try to steal promising "emerging producers" who have shown early results that indicate that they are likely to make it past the first 2-3 years and continue to grow.

Perhaps some of the headhunters who post on here can help you out with more background.

Apr 2, 2007 1:08 am

Just got into the POA program myself, so I don't have much experience other than my own.  I really don't think they would offer you more than 45K/year as salary.  But, you would be coming over with a little bit of a book, where as I came on fully licensed without a book.  The only down side of Merrill is you only get paid for your production if you make over your salary, then they cut you a check for the difference.  The bonus system is really great if you are a good steady producer, doesn't seem like you have to blow it out of the water to hit bonuses.  On the stock bonuses you mentioned just remember they are not fully vested for 8 years.  It's not hard to increase your net worth over $100,000 your first year, but if you leave before year 8 you don't get all of it.  Hope the little that I do know helps.  Oh, and don't let what all these other guys get to you, they think every decision new guys make is wrong and rag on you.  Makes them feel a little better about themselves, I guess. 

Apr 2, 2007 2:57 am

I was recently recruited by ML but declined the offer. My experience is my own and is not inclusive. As a recently licensed rep, I shopped myself around at several firms and received interviews from Smith Barney and ML. I was told the range in metro area for the POA program is 40k or more depending on the applicant and the period lasts two years.



After jerking me around for two months during the interview process, wasting a large amount of my time and almost getting my offer withdrawn at anohter institution at which I'd applied (the Ford funeral/market break was the excuse for no decision!), the branch manager did an about face when he called to offer me the job, stating that he would like me to come on. I said I was interested, at which point he said, "39,999.99, right?" I asked, "What is that?" I'd never heard this figure thrown out before and it obviously sounded arbitrary. I was then told, "well, you can get 40+ for 18 months, or anything under 40k for the full two years. This is the better deal."



I was furious at hearing this so late in the game after placing my search on hold at other firms. I had thus far not been notified of this aspect of the comp plan which he stated was for anyone in the program. I stated my offer elsewhere which was at a non-wire with a much larger base and some bonus potential. I indicated this would need to be matched at least or exceeded if for less than two years. The manager again tried to get me to accept the lower amount. I declined and immediately called to accept my current position, wishing I had done so much sooner.



Upon starting my new role, I met an individual with a college class mate who was a former POA employee from last year hired at 47k with no reduced timeline. This candidate was a new unlicensed college grad. While it is possible that my candidacy was not considered steller but just "good enough to bring on, take his book, and fire" this still doesn't change the fact that you can not trust anything an ML manager tells you about the comp plan in the POA program. Your own research here and perhaps at vault.com (good POA info) will be more realistic.

Apr 2, 2007 7:33 am

RJAVY - $10MM annuitized in 12 months = $100,000 in stock (vested in 7 or 8 years), and a $30,000 cash bonus. 


xbanker - I'm surprised you didn't recieve the POA booklet that they give to candidates.  This explains the pay structure.

Apr 2, 2007 8:20 am
xbanker:

I was recently recruited by ML but declined the offer. My experience is my own and is not inclusive. As a recently licensed rep, I shopped myself around at several firms and received interviews from Smith Barney and ML. I was told the range in metro area for the POA program is 40k or more depending on the applicant and the period lasts two years.

After jerking me around for two months during the interview process, wasting a large amount of my time and almost getting my offer withdrawn at anohter institution at which I'd applied (the Ford funeral/market break was the excuse for no decision!), the branch manager did an about face when he called to offer me the job, stating that he would like me to come on. I said I was interested, at which point he said, "39,999.99, right?" I asked, "What is that?" I'd never heard this figure thrown out before and it obviously sounded arbitrary. I was then told, "well, you can get 40+ for 18 months, or anything under 40k for the full two years. This is the better deal."

I was furious at hearing this so late in the game after placing my search on hold at other firms. I had thus far not been notified of this aspect of the comp plan which he stated was for anyone in the program. I stated my offer elsewhere which was at a non-wire with a much larger base and some bonus potential. I indicated this would need to be matched at least or exceeded if for less than two years. The manager again tried to get me to accept the lower amount. I declined and immediately called to accept my current position, wishing I had done so much sooner.

Upon starting my new role, I met an individual with a college class mate who was a former POA employee from last year hired at 47k with no reduced timeline. This candidate was a new unlicensed college grad. While it is possible that my candidacy was not considered steller but just "good enough to bring on, take his book, and fire" this still doesn't change the fact that you can not trust anything an ML manager tells you about the comp plan in the POA program. Your own research here and perhaps at vault.com (good POA info) will be more realistic.


They offered you what they thought you were worth to them. Apparantly, they think most people are worth more.

Apr 2, 2007 6:57 pm

In my whole experience the BM was upfront and honest about the whole thing.  He said that he could bring me in above $40,000 but the time line would only be 18 months.  He brought me in just under and I have the full 24 month cushion.  But, he also said that in his office all POA's will clear $80K on their W-2.  With the bonus system in place you can clear $80k and if you don't meet the hurdles you meet the front door.  Which is why I choose ML, they expect you to come in and bust your ass.  If you are not cut out for the industry you will find out soon, and if you are going to make the hurdles you can see good money soon. 

Apr 3, 2007 12:41 am

I'm only saying that the over/under 40k argument is BS. It's a very clever negotiating technique to get people to accept a lower amount. Don't accept a BM tellling you that he's bound by "company policy." It's simply not true. I know people who have started at Merrill, licensed or not, at higher rates. You should definitely demand the higer amound considering what they will do if you don't make it. (Show you the door and have a whole floor of people ready to take your book.) The risk if this does happen is exactly what has been stated; you have two firms on your resume in a very short period of time! I'd say to stay at Smith Barney and if you do move do it for a sign on bonus either at Merrill or elsewhere. I know the manager I spoke with specifically mentioned paying a Morgan Stanley recruit's 20k training fee to break his contract there in order to bring him over. If hands are tied at ML, why are there so many exceptions? And if there aren't, do you really want to be somewhere you're considered a number? Sounds like Smith Barney's not exactly a bad place to be anyway. I'd say sign on, highere base, or stay put. They're saving $6666 by the two months of NOT paying an unlicensed trainee. Make this quantifiable argument and ask for 47 or 48. (4 month training for unlicensed, 2 for licensed in POA.)

Apr 4, 2007 9:10 pm
xbanker:

I'm only saying that the over/under 40k argument is BS.
It's a very clever negotiating technique to get people to accept a
lower amount. Don't accept a BM tellling you that he's bound by
"company policy." It's simply not true. I know people who have started
at Merrill, licensed or not, at higher rates. You should definitely
demand the higer amound considering what they will do if you don't make
it. (Show you the door and have a whole floor of people ready to take
your book.) The risk if this does happen is exactly what has been
stated; you have two firms on your resume in a very short period of
time! I'd say to stay at Smith Barney and if you do move do it for a
sign on bonus either at Merrill or elsewhere. I know the manager I
spoke with specifically mentioned paying a Morgan Stanley recruit's 20k
training fee to break his contract there in order to bring him over. If
hands are tied at ML, why are there so many exceptions? And if there
aren't, do you really want to be somewhere you're considered a number?
Sounds like Smith Barney's not exactly a bad place to be anyway. I'd
say sign on, highere base, or stay put. They're saving $6666 by the two
months of NOT paying an unlicensed trainee. Make this quantifiable
argument and ask for 47 or 48. (4 month training for unlicensed, 2 for
licensed in POA.)





This is inaccurate.  First of all the ML POA program is actually
being re-vamped a little so that basically it allows for an additional
4 months to achieve the same goals (4 months to get licensed, 4 months
to be an "associate" where you gather your first 1.5 mil, then 24
months to finish).  This will be a good thing, and you heard it
here first (this is not known by very many people).



There are plenty of people that come in higher than $40k.  We have
hired people at over $90k salary.  But they get it for 18 months,
NOT the 24.  Anything over $40k will go for 18 months, under 40k
will go for 24 motnhs.  Some people have chosen to take a $45k
salary, but it stops at 18 months...they gave up $20k to get the $4,500
more (18 months vs the lower 40k salary for 24 months).  
Now, if one is certain they can graduate in 18 months or sooner, 
the highest possible salary may make sense...but one has to do the math.



Negotiate a salary of more than $40k for more than 18 months?  I
have seen it attempted many times, but never
successfully...ever.   Of course that does not mean it has
not happened, but one should not expect to deviate from the $40k/18/24
motnh rule.

Apr 5, 2007 2:11 pm

I don’t mean to beat a dead bull, but here is my insight on the topic.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


 


>$40k =


             4 months licensing (2 if already licensed)


             4 months mentoring (not yet offered at all offices)


             24 months of hitting hurdles with full salary


 


 


>$40k<$80K =


             4 months licensing (2 if already licensed)


             4 months mentoring


             24 months of hitting hurdles with 18 months of salary (contrary to popular misconception, you still have 24 months to graduate)


 


In my office there are almost 35 POAers of which the majority are in their licensing or mentoring phases.  It is my guess that most of the POAers in my office are well above the $40k cutoff with many of them closer to $80k.  I have known of only one person on the 24-month program and he chose that route because he was joining in with his father’s team which is almost 100% transactional.  He has since graduated POA and my understanding is that his commissions exceeded his salary since he was mostly transactional.


 


In my nine months at this office I have seen people leave (or asked to leave) because they failed the 7, failed the 1st assessment (after being completely licensed), missed their hurdles or made the hurdles but couldn’t afford being off salary.  Prior to joining here I heard of a few that graduated POA but couldn’t afford being off salary.  I’ve been told that the first year or two after graduating POA are the most challenging since most can’t afford the drastic pay cut.  If you consider ML be sure that you budget yourself for a few lean years should you even make it to graduation.


 


--WM

Apr 5, 2007 6:05 pm

Gents,


Thanks for all the good informative feedback. I guess I am going to stay at Citi. I was never really looking to make a move in the first place, but when I was cold called in my office and told all these great things, I couldn't help but to be interested. Smith Barney is already paying me a $45K salary guaranteed for 18 months. And from what it looks like here, I don't think I'd get any higher than that. So even though the bonuses are much better at ML, I guess I'll stay for at least the 3 years here at Citi, and then see what shakes out. Thanks for the help... MOST OF YOU ANYWAYS. (You always know the bitter old men in the office. haha)

Apr 5, 2007 9:58 pm

A good friend of mine started at ML when we graduated, graduated from the program (hitting every hurdle) early, and was still let go. 

That left a bad taste in my mouth regarding ML.  I have another friend who has been there for about 5 years and he's happy as a clam.

I'm personally completely happy with the training program I am in at Morgan Keegan.  The training is outstanding and the pay is right.
         

Apr 5, 2007 10:04 pm
ChrisB:

A good friend of mine started at ML when we graduated,

graduated from the program (hitting every hurdle) early, and was still let

go. That left a bad taste in my mouth regarding ML. I have another

friend who has been there for about 5 years and he's happy as a clam.I'm

personally completely happy with the training program I am in at Morgan

Keegan. The training is outstanding and the pay is right.    





Thank God!



Chris, you've restored my faith. I didn't think there were any rookies

around who felt they were getting a good deal!



My hat's off to you, and best of luck!

Apr 5, 2007 11:24 pm

I appreciate it Philo.       

Apr 6, 2007 12:14 am

I just want to throw out a few things about POA to round out my experiece and basically say I think it can be the best way to go depending on one's circumstance.



-I didn't go elsewhere becuase of ML, but because of the manager at the specific branch at which I interviewed.



-In general, it was the best situation of any wire I looked at. (Not that this is a huge accomplishment.)



-If you can get a decent salary, go for it. They're after your natural market and will likely fire you after, just like any other wire. You need to be compensated with a premium in salary for risk assumed, just like wit anything else.

Apr 6, 2007 1:09 am

In my opinion the big thing that separates ML from the other wirehouses is the training.  Specifically, making POA's go through the CFP program.  I think that really shows that they want to invest in the POA's and are not just using them for their natural market.  Even if you don't make it at ML as a POA you really do walk away from there as very attractive to any other firm.  You are fully licensed, have gone through the best training in the industry and are half-way through the CFP certification.  That's hard to beat.