BAC Losing More Reps

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Mar 4, 2008 11:06 pm

We just lost 2 guys doing $750k each. UBS seems to be luring top producers. Last year they lost a $650k producer from the same office to them also.


Wondering if anybody else out there is seeing a further exodus of top producers. The funny thing is they have a lousy payout for that top talent, but not near as bad as anybody under $350k is getting burned. Any place that decides to withhold 15% of commissions you've already earned and only gives it back at the end of the quarter if you refer the bank new business is definitely being run by bankers and not fa's. It sounds like this year if you don't refer 5 new households a quarter to premier to help add to their book you pretty much get screwed out of the bulk of that. Funny we get penalized 10% of revenue, which is already one of the lowest payouts in the industry, for the first year on any account the bank refers us, and now we are expected to bring the bank business. If you are 250-300k you are getting 25% payout. Hence, you sell $1000 commission you get $250 minus 10% if premier referred it to you equals $225 minus 15% to be held until the end of the quarter for the discretionary payout equals a whopping $192 I think, so 19.2% payout.
 
Most certainly the investment house is being run by bankers. I wouldn't be surprised if they have FA's on salary two years from now, as they seem to be flooding the system with Pathways(Junior Brokers who start on salary). It would seem they'd have quite a large workforce that will have been used to working on salary at some point and therefore will make it much less desirable for the top producers to stay. That way they don't have to answer to the top producers as any wirehouse would. Also note that it is not Banc of America Investment Services any longer, but Premier Banking and Investments. Another possible sign of a future merger of roles. That way they could have both sides on salaries of 60k-90k w/ bonuses and not have the $250k guys always asking questions about why there are no advisor advocates. Also, there seems to be about 100% more micro management than there was 3 years ago, and everything is centered on doing everything together now.
 
Just my observations. It appears to be moving in that directions, and I'm seriously questioning building a fee based business here if that is the case.
 
Looking Elsewhere,
I only have 15 million in fee based and from what I here that is not enough to go indy as only half would stay? Any suggestions?
 
 
Mar 5, 2008 1:31 am

Yikes...that sucks

Mar 6, 2008 11:31 pm

As bad as the deal sounds for the sub $350K producers, think of the $1 million producers over the last few years.  They had 8% of their trails held back to fund their year-end bonus.  Yes, their own money was used to pay their bonus (they could qualify for more if they did all the banky stuff). However, their own money was returned to them in the form of Bank of America stock that vested over three years.  B of A stock, like most financials, have been pummelled.  A high-end FA qualified for $50K of his own money, but it's only worth $40K now.  And he's only vested for a third of it.  He's stuck between staying to collect his money (but then having additional future "bonuses" added to his unvested amount) or leaving and taking the hit.

Mar 6, 2008 11:34 pm

To answer your last question, I can't speak for the indy-side of the equation but I've seen several B of A brokers leave and they did not have any problems taking most of their book.  It was a simple matter of pointing out, "Your account will be handled by a Pathways broker at Bank of America if you choose to stay there." 

Mar 7, 2008 7:53 pm
BACFA:

As bad as the deal sounds for the sub $350K producers, think of the $1 million producers over the last few years.  They had 8% of their trails held back to fund their year-end bonus.  Yes, their own money was used to pay their bonus (they could qualify for more if they did all the banky stuff). However, their own money was returned to them in the form of Bank of America stock that vested over three years.  B of A stock, like most financials, have been pummelled.  A high-end FA qualified for $50K of his own money, but it's only worth $40K now.  And he's only vested for a third of it.  He's stuck between staying to collect his money (but then having additional future "bonuses" added to his unvested amount) or leaving and taking the hit.

 
would you rather "buy" the stock higher?
Mar 19, 2008 3:27 pm

Does anyone who was recruited in the last few years, 2005-2006, recall being shown or given a copy of an article in your recruiting materials that showed the average BAI broker returned to their trailing 12 production within about 18 months vs. the industry average of about 24 months?  I would be grateful if anyone can provide me a copy.  Please send me a private message.  Thanks!

Mar 19, 2008 8:08 pm
alwaysbullish:

Does anyone who was recruited in the last few years, 2005-2006, recall being shown or given a copy of an article in your recruiting materials that showed the average BAI broker returned to their trailing 12 production within about 18 months vs. the industry average of about 24 months?  I would be grateful if anyone can provide me a copy.  Please send me a private message.  Thanks!

 
If you saw it, and I have, it was an internal spread sheet and not  a published piece of literature.  As such, it wont hold up where I'll bet you would like to use it.
Mar 20, 2008 3:29 pm

southcampus,

 
You better do the math instead of counting on what you hear is an acceptable aum to go indy. If you lose half of your fee based you can make it easily.