Non-compete agreements for Trainees

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Jul 22, 2009 9:02 pm

My son (who moved half way across the country from me to go to grad school) was cut from the Merrill Lynch training program in December and recently joined another wire with a fellow Merrill trainee. They were in production for about a year and each had @ $7 million under management, but were let go as part of the downsizing wave. I am an Indy advisor, and have no current experience with protocol as it applies to trainees. I believe that a "repayment of training costs" agreement is the standard, as is a non-compete, but does anyone have any real time experience with wheher this is typically enforced. I am doubting that everone that was cut by Merrill, Wachovia, UBS et al left the business or did not attempt to transition clients. How did it play out? I am a worried Dad. Thanks!

Jul 22, 2009 9:08 pm

If you are fired, they have a hard time enforcing a non-compete or repayment of training costs. If you voluntarily separate, then they can come after you for that stuff.

Jul 23, 2009 11:34 am

If you are let go from Merrill they can't enforce the agreements.  If you leave voluntarily they WILL come after you.  I left Merrill a month ago and got a letter in mail 2 days later wanting repayment of training costs.  I called the law firm, explained the circumstances of why I left and my inability to pay the ridiculous amount and they dropped it.  They can legally come after you though if they want to persue it.

Jul 24, 2009 12:06 am

I left UBS after 18 months and was able to transition most of my clients to my new B/D. No muss, no fuss. No repayment, no non-compete. Of course, they have more than enough to worry about these days, and probably didn't even notice I left... I had a measley 9.7MM in AUM.

 
Much happier now. 14MM and growing at my new B/D :-)
Jul 24, 2009 1:31 am
DeadBull:

If you are let go from Merrill they can't enforce the agreements.  If you leave voluntarily they WILL come after you.  I left Merrill a month ago and got a letter in mail 2 days later wanting repayment of training costs.  I called the law firm, explained the circumstances of why I left and my inability to pay the ridiculous amount and they dropped it.  They can legally come after you though if they want to persue it.



 
Thanks and best of luck to you going forward. It is a shame that Merrill came after you.