ML “Transition” Packages are out

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Oct 24, 2008 1:21 pm

The Merrill Lynch “Transition” packages are out.  As I suspected, only the top producers are getting good deals.  I bet that we will see a mass exodus of FAs with less than $750k annualized production. <?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Oct 24, 2008 1:34 pm

Yes, out with the details please!!!

Oct 24, 2008 1:41 pm

I remember yesterday somebody else on the forum did say that BAC was not going to pay a retention bonus to any rep with a TT of under 750K.

 
That thundering heard is about to stampede out the door if this is true.
Oct 24, 2008 2:09 pm
Broker Fee:

I remember yesterday somebody else on the forum did say that BAC was not going to pay a retention bonus to any rep with a TT of under 750K.


 
Not quite.  There are multiple parts but under $750k there is a huge dropoff.
Oct 24, 2008 2:39 pm

http://www.bloomberg.com/apps/news?pid=20601087&sid=aOGOU1WuX88&refer=home

Oct 24, 2008 2:46 pm
Broker Fee:

I remember yesterday somebody else on the forum did
say that BAC was not going to pay a retention bonus to any rep with a
TT of under 750K.

 
That thundering heard is about to stampede out the door if this is true.







Where do you envision them going?

Oct 24, 2008 3:51 pm

500-750k saleable to MS or SBarney.

Oct 24, 2008 4:02 pm

Yay crappy retention packages!

Oct 24, 2008 5:21 pm
 
 

The long-awaited Merrill Lynch retention package has arrived. Not surprisingly, top producers will probably be pleased, but others may not.

According to a source familiar with the deal, payments will be made on a sliding scale, with Merrill FAs who generated $1 million in production over the last 12 months getting a forgivable loan equal to 100 percent of their previous 12 months’ production figure in upfront cash and deferred bonus.


Those reps producing over $1.75 million will get 75 percent in upfront cash, taxable over 7 years, and another 25 percent in deferred bonus over 3 years. For reps producing $1 to $1.75 million, the package includes 75 percent in cash upfront, but the other 25 percent will be based on growth in production over a three-year period.


For the rest of Merrill advisors, the package ranges from a total of 75 percent of trailing 12 to 20 percent. Advisors producing $750,000 to just under $1 million will get 50 percent upfront cash, taxable over 7 years, and 25 percent on growth in production over three years, while those producing $500,000 to $750,000 will get 25 percent cash over 7 years and 25 percent on growth. For advisors producing $250,000 to $499,000, the deal includes just 20 percent on production growth in deferred cash over three years.


The Merrill deal is in line with what Wachovia paid to A.G. Edwards reps after that firm was acquired, but it is less than what Bear Stearns advisors got: There, reps producing $500,000 or more got 100 percent. Will the Merrill package be enough for FAs when their deferred comp packages have been flattened by plummeting Merrill stock, and when some wirehouse firms are still offering fat recruiting packages? 


"What happens is that everybody who makes $499,000 to $1 million is now in play," says an advisor who generates $750,000 in production. "The message being sent is bankers versus brokers. Commercial bankers don't understand what advisors do. At other firms, a guy who makes $750,000 to $800,000 is valued by the firm." 

Robert McCann, president of the global private client group, has told managers in recent weeks that the intended result of the package was to “build a wall around the top two-thirds of production.”

An executive at a competing firm was quick to offer judgement on the numbers: “This will engender a great deal of disappointment among their FAs,” he says.


"In the context of extraordinary change in financial services and a volatile market and economic environment, it is important for clients, shareholders and the future of the combined company to retain top-performing advisors at the two current firms,” said Robert McCann, vice chairman and president, Global Wealth Management at Merrill Lynch in a statement. “This transition award, which is fully realized over multiple years, will help ensure that clients receive thoughtful advice, guidance and world-class service from the financial advisors they have chosen and trust, and that the full long-term value of this combination is realized.”


"This program is about helping Main Street clients navigate the most volatile markets we’ve seen in decades,” said Keith Banks, president of Bank of America’s Global Wealth & Investment Management division. “That’s the role of these advisors in the local communities where they too live and work. That’s the commitment of our company now and going forward and the reason we plan to combine these two great firms.”


 
 
Oct 24, 2008 5:50 pm

 Saw a group of ML guys today in the courtyard, they looked like they were shocked by the events..Guess they could leave, but just wonder how you explain that you are leaving because you were not happy with the retention package??  Can't imagine clients who have lost 50% care one bit about your bruised ego. 

 
Biggest shock going to now when they look around and the others shops now offer you a piker package compared to what was there 90 days ago.  If this market just grinds its way down to DOW 5000-6000 have to wonder what this biz will look like?
Oct 24, 2008 5:51 pm

There's something outrageous about this scenario:
Merrill loses $51 billion in the subprime disaster, goes bust, has to be rescued by Bank of America -- and now the top brokers are getting bonuses to stay put.
Yeah, I know the brokers didn't lose all that money, and yeah, I'm all for everybody getting what they can, and yeah, ML brokers are creme de la creme -- but to the general public, this will be seen as the rich getting richer and walking away unscathed.
If I was a client I'd be asking why my broker is getting a check so he can keep MY money with ML/BAC. If my account is so valuable, why don't they just send me part of that bonus.

Oct 24, 2008 5:59 pm
fritz:

 Saw
a group of ML guys today in the courtyard, they looked like they were
shocked by the events..Guess they could leave, but just wonder how you
explain that you are leaving because you were not happy with the
retention package??  Can't imagine clients who have lost 50% care
one bit about your bruised ego. 

 
Biggest shock going to now when they look around and the others
shops now offer you a piker package compared to what was there 90 days
ago.  If this market just grinds its way down to DOW 5000-6000
have to wonder what this biz will look like?





You know what that sounds like, Fritz?  It's sounds like you're saying EVERYTHING IS DIFFERENT NOW.



And you'd be right, in spades.

Oct 24, 2008 6:04 pm
Provocative Put:
fritz:

 Saw a group of ML guys today in the courtyard, they looked like they were shocked by the events..Guess they could leave, but just wonder how you explain that you are leaving because you were not happy with the retention package??  Can't imagine clients who have lost 50% care one bit about your bruised ego. 

 
Biggest shock going to now when they look around and the others shops now offer you a piker package compared to what was there 90 days ago.  If this market just grinds its way down to DOW 5000-6000 have to wonder what this biz will look like?



You know what that sounds like, Fritz?  It's sounds like you're saying EVERYTHING IS DIFFERENT NOW.

And you'd be right, in spades.

 
Did not want to say it but i think it is..good call PP
Oct 24, 2008 6:09 pm

Well the BAI retention package sucks even more if you've been there since 2005 and had any type of agreement based on your original hire. That package is absolutely, freakin nothing regardless of production. I believe it is 40-50% 1 mill plus for a 3 year vest and works it way down to 20% for $350-500k.  I believe that is the middle column on the previous page. Again if you have any type of previous agreement from 2-3 years ago you are excluded.


 
Based on our calls it appears we are working under Merrill's badge now (not a big surprise). Moving 2000 FA's in with 16000 FA's is a lot easier than the opposite. One good thing for us is it appears they will keep the Merrill grid and since most of us don't get the referrals we were promised it was basically like working in a wirehouse without getting paid wirehouse grids.
 
What is the current Merrill grid?
 
Good Luck to all in making it through this transition and market.
Oct 24, 2008 6:24 pm
fritz:

Did not want to say it but i think it is..good call PP


Blind leading the blind.

Oct 24, 2008 6:24 pm
buyandhold:


If I was a client I'd be asking why my broker is getting a check so he can keep MY money with ML/BAC. If my account is so valuable, why don't they just send me part of that bonus.

 
Or you could leave an advisor you trust and take your money to someone who know doesn't you from Adam (and hasn't recieved a retention package).   Or when your advisor leaves you can let the manager assign you a new rep (be sure that they didn't get a retention award) and hope it works out. 
 
It's your money.  Do you feel lucky?
 
I guess if you're not with someone you know and trust and don't value the relationship it shouldn't matter either way, so why complain.
Oct 24, 2008 6:29 pm

At the end of the day ML'ers will have to figure out if they are with the right firm/bank. The retention bonus should me insulting and the couple I have talked to concurr. They need to look at UBS, maybe MS, maybe Citi and Indy. They should be careful of the regionals owned by banks.

Oct 24, 2008 6:33 pm

ML brokers are creme de la creme????? says who??

Oct 24, 2008 6:42 pm

You know what's a joke?

 
A bunch of salesmen who should really be looking for a job whining about being given "Only" several hundred dollars if they won't quit.
 
If I were B of A I'd fire everybody and then accept applications from those with enough sense to know they're in a bird's nest on the ground.
Oct 24, 2008 6:45 pm
ezmoney:

ML brokers are creme de la creme????? says who??





ML brokers