ML Layoffs - No severance?

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Jan 27, 2009 10:57 pm

I was a ML PMDP trainee up until yesterday. As I'm sure everyone is aware, most of the program was cut - and it seems evident that there are more layoffs to come. 

 
Everyone layed off was a salaried employee. We were layed off, regardless of our standing within the program, or how well we fared in terms of the goals/hurdles set forth for each respective person.
 
No severance packages were handed out (at least in the case of my complex). Did anyone here receive such a package? Also, I thought when there was job cuts by firms for cost cutting reasons (as oppossed to for performance reasons), that severance was automatically given to those let go. Can anyone clarify this for me? I understand producing commission based brokers would not receive some kind of compensation if terminated (they are normally only terminated for misconduct etc.), but how could this be for those in the trainee program who were let go? I thought severance packages applied to all salary based employees? Thanks!
Jan 27, 2009 11:22 pm

Those rules, along with overtime and vacation, don't apply to FAs.  I seem to remember reading something about it in the package I signed when I started.

--WM

Jan 27, 2009 11:27 pm

Isn't there a distinction between a salaried FA in a training program, and a regular fully-commission based FA? I'm under the impression when there is cuts for cost cutting reasons no matter what, people are to get some kind of package. These cuts were based for performance. Does anyone have a copy of their guidelines to the program?

Jan 28, 2009 8:37 am
justdrastik:

Isn't there a distinction between a salaried FA in a training program, and a regular fully-commission based FA? I'm under the impression when there is cuts for cost cutting reasons no matter what, people are to get some kind of package. These cuts were based for performance. Does anyone have a copy of their guidelines to the program?



I believe that salaried FAs in the training are on a forgivable draw(l)...hence why if your production was higher than salary, you would get paid on production instead.

--WM

Jan 28, 2009 9:15 am

Your "salary" during POA/PMDP is a forgivable draw.  No severence package.


ML business model is based on failure.

100 new hires bring in 5 million each = $500 million new money.
If 80 of them fail and leave and ML hangs on to 50% of that money, it's not a bad deal for the firm. They have been doing it this way for years.
 
We all hope we can beat the odds, and make it through the program, but it is very difficult.
 
My best to all former ML FA's. I am one of them, and I am moving on. This too shall pass.
Jan 28, 2009 11:17 pm
blackduc:

Your "salary" during POA/PMDP is a forgivable draw.  No severence package.


ML business model is based on failure.

100 new hires bring in 5 million each = $500 million new money.
If 80 of them fail and leave and ML hangs on to 50% of that money, it's not a bad deal for the firm. They have been doing it this way for years.
 
We all hope we can beat the odds, and make it through the program, but it is very difficult.
 
My best to all former ML FA's. I am one of them, and I am moving on. This too shall pass.
 
You hit it on the head.  The worst thing you can do is make it in their eyes.  Then you leave in a few years and take a nice check and bring most of your book.  If everyone fails, thats GREAT NEWS.
Jan 29, 2009 5:57 pm

I believe that if you are still pre-production, studying for licensing exams, and have not yet received your FA# then you are eligible for severance. The magic moment where that changes is once you receive your FA# and go into production. From that point on severance is not paid.

Believe me I wish it were different as I am no longer with ML but that is what I have heard.

Jan 29, 2009 11:16 pm
NoBullFA:

I believe that if you are still pre-production, studying for licensing exams, and have not yet received your FA# then you are eligible for severance. The magic moment where that changes is once you receive your FA# and go into production. From that point on severance is not paid.



Isn't there something about a probation period for the first 90-120 days or so?  It's been that way at other companies that I worked at.

--WM

Jan 31, 2009 5:26 pm

Interesting thread.



I'm not at Merrill but Jones isn't that much different. Our critical mass point where you make it or break it seems to be years 3,4,5 rather than year 2.



Our quotas are lighter but we have less opportunity to join teams. I think it's harder to attract serious money to Jones though it still can be done. No options or alternative investments - those would be nice quivers to have in this tough market.



Brokers always take it on the chin if somethings goes wrong. Severance or security?? It's funny how we jump through hoops for risk management for our clients and yet expose ourselves to ridiculous risk in the thin hopes of "making it". Then on the cusp of success we're passed by the asset inheriting buddy.







Feb 4, 2009 1:13 pm

I heard there were more PMD layoffs to occur this and next Friday. Can anyone confirm this?

Feb 4, 2009 3:28 pm
Swordoftruth:

Interesting thread.

I'm not at Merrill but Jones isn't that much different. Our critical mass point where you make it or break it seems to be years 3,4,5 rather than year 2.

Our quotas are lighter but we have less opportunity to join teams. I think it's harder to attract serious money to Jones though it still can be done. No options or alternative investments - those would be nice quivers to have in this tough market.

Brokers always take it on the chin if somethings goes wrong. Severance or security?? It's funny how we jump through hoops for risk management for our clients and yet expose ourselves to ridiculous risk in the thin hopes of "making it". Then on the cusp of success we're passed by the asset inheriting buddy.

 
Very true.  Jones goes through quite a few trainees.  My guess is that Jones is less interested in trainees as "asset gatherers", since I see many cut out well before they have gathered almost anything at all.  If they wanted to gather assets, they would let them hang around longer.
Feb 4, 2009 4:33 pm

Our Regional Director was in our office yesterday and made it sound like the PMD cuts on the Merrill side are done for the time being but that large cuts on the BofA side are next to come.

Feb 4, 2009 4:45 pm

Like justdrastik I also got axed at ML on 1/26. It seems like even if you were making your goals you got canned. As far as severance pay goes, I got none, but would pursue it if there's a possibility. Doesn't seem likely.



Apart from EJ who else might be hiring Licensed FA's w/ 2.5 years experience and many outstanding professional qualifications?



Thanks,

Feb 4, 2009 4:51 pm

5.5M total AUM, 2.8M annuitized; month 11 in POA program.

Feb 4, 2009 7:56 pm

Thanks for the feedback. I've got a few options including Morgan & Wachovia, but will check several more. I don't want to be in a similar situation a year from now!

Feb 4, 2009 11:31 pm

What would you say to new hire in the program who recently found out there is a hiring freeze.  "Whew, I got in just in time" or "You're screwed, keep your eyes open"

Feb 5, 2009 11:56 am

Which firm are you with? If its with Merrill I would either actively persue joining a senior team or polish your resume.

Feb 5, 2009 11:58 am

I'm wiwth Merrill and I'm polishing!!

Feb 5, 2009 11:59 am

I'm with Merrill and I'm polishing!

Feb 5, 2009 12:04 pm

That is a very wise move.