Merrill Non-Compete Language
Looks like Merrill and BOA are hanging their advisors by the ba11s. They have essentially put the "non-compete" clause into their retention bonus agreements.
I have mixed emotions about it. On one hand, it's really anti-competitive, but on the other hand, BOA has to ensure that it can retain the value it has purchased in ML. It's tough when your only company asset (in the BD world) are the human beings that work for you. I can't think of another major industry that works like this one (CPA's, consultants, doctors, lawyers, are all in the same camp, but you don't have massive firms with massive turnover among producing employees like in this industry).
As I understand it, everyone who 'clicks' and accepts the deal is on the hook for a very very long time and needs to be prepared to rise or sink with the ship that BofA of about to take over.
I've been told by a few people who've sought some counsel that there's a window, basically, free and relatively clear if one leaves BEFORE the deal closes regardless of accepting or not accepting the retention. After that.. game over. I hope everyone is really examining this closely. BofA plays a totally different game and ML is not going to be ML anymore.
Just wait when they stall calling it RMG and make the ML FA's do more widgets than production!
can't wait to hear all the excuses the ML guys tell their clients why their heading for the doors. Time to get in contact with all the ML prospects in the database.
As Ken Lewis says, to the victor go the spoils. He is not, nor is any banker overpaid. It is just "Wallstreet" [said with a sneer]. He is buying your business and feels like he has every right to it. When I was there we were not allowed to buy brokered CD's since the bank had them. Couldn't deal well with businesses because the bank has a group that does that too. Maybe your clients have too much in the money market. They have a spreadsheet that will explain all that too you, since they know way better than you, the "client facing associate".
There is a reason that BofA has always wanted ML. And it isn't just for the revenue generated on the AUM.
The validity and enforceability of noncompete clauses is governed by state law. What may be legal in North Carolina may not be legal in Virginia, my home state. My firm writes a blog on noncompete and nonsolicitation issues at: http://virginianoncompete.blogspot.com/
Like I said, ML FA's are beginning to see what a vacuum cleaner looks like. Here comes the non-compete. Also if you work for BAC as an advisor, any clients you bring in are property of BAC. Same with intellectual property. UNLESS you have it in writing, your clients now belong to BAC especially if you sign the retention package. That's how they've always done it. I would be very surprised if they don't do that for ML advisors.
Also, if you don't know it. ..... BAC is not part of the protocol firm network, like ML, SB, etc... This means that you cannot solicit under their non-compete agreement usually for one year. So much for laying down your client list on the table with names and addresses of clients you'll take with you upon departure.