McCann Leaves MER...Hmmmm?
So McCann suddenly decides to leave the firm today? The press is quoting that this is due to him being bumped down a notch by not reporting directly to Thain in the new ML/BofA management structure. The problem with this explanation is that this structure was announced 3 months ago. So, I'm thinking there was either:
A. A failure to deliver on some management objective- for example, the failure to competently handle the rollout of the retention package or the new compensation plan, or perhaps we are losing more advisors than expected.
B. He now sees the vision/game plan of BofA and knows its going to be a clusterf*#k- so he gets the hell out of dodge now.
Ive been through 10 mergers with BAC always on the buy side. Let the games begin. What is initially announced and what happens after legal day 1 are two entirely different things. your boy probably got paid big to go away.
C. McCann has a legendary and slightly irrational temper. Also openly pines to be the top dog. He clashed with oNeal and Thain and was not likely a huge hit in Charlotte.
The purge begins. Will Sontag survive yet again?
It will be interesting to see how this plays out. With McCann gone, will there be a wholesale change at ML & Co? How this plays out will tell us allot about the future, and about BofA's intent.
At least the comp plan will stay in place for a whole year until they change things once again : ) Truthfully, does either McCann or Sontag play a big role in the everyday lives of an FA? All they do is pass on orders to the ridiculous layers of management and host DBS calls every once in a while.
My initial reaction was the departure was planned for the first full day of the new year (Friday was too quiet to really count). I'm not sure what it will mean in the long run, but my guess is you will see more of the long term MER upper management slowly and voluntarily working their way out of the company.
Any ML guys care to comment??
January 6, 2009, 12:33 pm
Will Merrill’s “Thundering Herd” Stampede After Leader Quits?
Posted by Heidi N. Moore <p>Bank of America CEO Ken Lewis is now waving the red flag in front of Merrill Lynch’s “Thundering Herd” of 17,000 brokers. </p>
Bob McCann, the 26-year Merrill veteran who oversaw the brokerage
force, will leave the combined Bank of America-Merrill Lynch. For those
who know Merrill well, it is a gasp-inducing move. McCann was one of
the rare leaders who had the full support of the Merrill brokerage
force, which was often called the “crown jewel” of the firm — and knew
it. The unit is lucrative for Merrill. Merrill’s financial advisers
brought in $862,000 of revenue each for the firm in the first quarter,
and it is consistently the industry leader or in the top three for
revenue per financial adviser and the amount of assets those advisers
Merrill’s advisers were wary of the acquisition immediately after its announcement,
fearing that Bank of America’s cost-controlling ways would hit their
paychecks, but McCann’s intention to stay was thought to quell some of
Standard & Poor’s today showed no patience. “This departure
would gives us cause for concern regarding a possible clash of cultures
between BAC and Merrill, particularly considering that BAC is a more
cost-conscious company. In our view, Merrill’s brokerage unit was
likely the main attraction for BAC in completing the acquisition, and
if brokerage attrition picks up, the acquisition becomes less valuable.”
McCann’s departure came after tension with John Thain, report our
colleagues Randall Smith and Susanne Craig, who said today, “At a
meeting for Merrill employees, Mr. Thain jokingly accused Mr. McCann of
leaking a newspaper article about his future role at the combined
company as Mr. McCann visibly reddened, according to people familiar
with the meeting.” That is a far cry from the peppy quotes McCann gave
to trade publication On Wall Street in January after Thain’s hire, when
he said, “John Thain has made it clear, both behind closed doors and in
the interviews he’s done, that wealth management is a great business.
He wants to cherish and grow the business.”
McCann’s own rise within the firm show how hard the brokerage force
is to please. In 2001, Merrill Lynch named Australian former consultant
and chief marketing officer James Gorman to oversee the U.S. brokerage
and then, in 2002, to oversee the entire global private client
business. Gorman, who was never a broker himself and thus had little
’street cred,’ with the grumbling force, immediately set about cutting
jobs as Merrill slashed 18,000 positions within the firm, suffering the
resentment of many of the brokers. Gorman headed the unit for only two
years before being moved to oversee corporate acquisitions in Merrill Lynch in 2005,
making way for McCann to leave his role as head of research and take
over the brokerage himself. Gorman eventually left to head the
brokerage group at rival Morgan Stanley in 2007. Australian financial
publication the Bulletin interviewed Gorman after he left Merrill. The
article concluded, “Gorman says he feels more accepted at Morgan
Stanley than he did at Merrill Lynch….’A lot of FAs [financial
advisers] at Merrill were not outright hostile, but I could tell they
were deeply cynical. I understand. I would have felt the same way,’ he
McCann, vetted and adored by the brokerage force, went to bat for
them in Washington to protect their paychecks. In late 2007, he lobbied
in Washington to reinstate “wrap accounts,” which required clients to
pay brokers a fee based on assets held with the firm instead of trades.
A court had rejected such accounts in a decision often called “the
Merrill Lynch rule” because it made brokers into what Wall Street calls
“fiduciaries,” or stewards of clients’ capital with a legal
responsibility to preserve it. McCann was unsuccessful in the effort,
but his advocacy made him even more popular with the brokers.
With McCann’s departure, Merrill’s brokers are more open than ever
to poaching. There is a threat to Bank of America implicit in McCann’s
departure. “His departure says the deal, consummated Jan. 1, isn’t
working for him,” wrote MarketWatch columnist David Weidner. “In turn,
that tells the rest of the thundering herd, that it may be in their
best interests to walk too.”
For brokers, the Wall Street jobs crunch is nearly meaningless.
Wealth management is one of the few growth businesses left in Wall
Street’s quiver. Gorman, still building the wealth management business at Morgan Stanley, on the hunt for acqusitions,
and now co-president of the entire firm, knows Merrill’s brokers well
and it would not be surprising if he wanted to recruit them. Just as
importantly, many brokers are going down the route of hanging their own shingles as independent advisers.
For more on McCann’s deputy and expected successor, Dan Sontag, and
his well-known involvement in a “market timing” debate at the bank,
check out this Wall Street Journal A1 story.
I read that he wanted to leave from the start, but agreed to stay on through the end of the year....
"According to sources at Merrill, McCann nearly resigned at that point but decided to stay and see how the merger worked out.
After taking a couple of weeks during the holidays to deliberate, McCann determined that he would leave. Sources say that Merrill's immediate worry now is how McCann's resignation might affect the brokerage salesforce."
Maybe McCann realizes all the "scale and scope" the "universal bank" model brings to the brokerage firm.
Incorrect. FA Comp plans change quarterly at BAC. You will get a new introduction to Tur-ducken........surprise, you thought it was turkey but it was possum wrapped in turkey..
The comp plan doesn't change each quarter, technically it is "clarified" and made "simpler". Isn't that better?
Make way for the Attack of the Short Sleeves and Short Ties.......AHAHAHAHAHA. The Jos A Bank and cheap wing tip soled Army is on the march!
Former, and I do mean, former MER advisors, when legal day 1 hits, you better have a diaper ready. Cauze you will be issued weekly enemas......you will quickly start to realize you been had.
McCann cant stay because he probably has some vestige of integrity and knows this is going to be a retaining pond of Beeeuullshhyt that is about to break its earthen walls.
Oh and as I mentioned to poster Sellout, your comp plan is not guaranteed to be static for a year. You assume way too much. Too logical and fair dealing.
BAISI loves to mix it up and revise and slice and turn your pretzel logic comp plan inside out on a quarterly basis....20 pages of mishmash, if -then code....shyt if you cant write program in Cobol you will never figure it out.
Remember, the 200 person HR Layer has to keep themselves occupied with 'change that reflects industry metrics" to give themselves makework tasks.....to cop a paycheck. Just like Obama is going to do with his jobs program....
I hate it but sure as hell glad it aint me.
You knew this was going to play out as well. Attack of the Jos A Bank and cheap wing tip soled Army. They are on the march....grab yer ankles
Maybe someone thought he was in the POA program and he got laid off with the rest of us?