MS, and revolving door

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Nov 11, 2006 1:08 pm

Since they announced the new pay out will brokers be heading out the door? More likely yes. But to play devils advocate we will also be getting new brokers. What upsets me most is that i do a fair amount of business and they are going to use the money i earn to pay them to come over here. So the question is, like the title of the Clash song,Should i stay or should i go?

Nov 11, 2006 3:40 pm

I think that MS mgmt has really learned the lesson that it MIGHT be cheaper to retain the FA's that they already have, that are doing >300k rather than to recruit such FA's that are doing these #'s at rivals. But they are moving in this direction at such a slow pace it is hard to be sure. Hence, your indecision. Mgmt really needed to make a bolder move, more along the lines of the Wachovia model. Wachovia has so many different ways to access their platform, why would an FA ever leave? Unless, it was just to get THE CHECK? I'm sure many others share your frustration, it seems so obvious that mgmt needs to really shake things up. But, as with all the other FA's that have left, it is more a problem for mgmt and shareholders not existing FA's. If anything, the bidding wars might work to your advantage!   

Nov 11, 2006 5:27 pm
Elvis:

Since they announced the new pay out will brokers be heading out the door? More likely yes. But to play devils advocate we will also be getting new brokers. What upsets me most is that i do a fair amount of business and they are going to use the money i earn to pay them to come over here. So the question is, like the title of the Clash song,Should i stay or should i go?



I'm confused. If the new payout causes brokers to leave, then why would it also cause others to come over from other firms?

Nov 11, 2006 6:48 pm
mktsystms:



I'm confused. If the new payout causes brokers to leave, then why would it also cause others to come over from other firms?

 I would assume that MOST brokers would be induced to join MS because of the big CHECKS, not the payouts! I think this is probably what Elvis meant.  

Nov 11, 2006 10:12 pm

I don't work at MS, but from everything I've read about the new comp plan, there was a slight INCREASE in payout (especially if you gross more than 500k). I don't know why brokers would be leaving if this was the case (unless you are talking about low producing brokers.) 

Nov 12, 2006 6:02 am
BondJamesBond:
mktsystms:



I'm confused. If the new payout causes brokers to leave, then why would it also cause others to come over from other firms?

 I would assume that MOST brokers would be induced to join MS because of the big CHECKS, not the payouts! I think this is probably what Elvis meant.  



The big checks are a one time event, but if the payouts are so much worse at MS compared to the other firms, then it wouldn't take long before the benefit of the upfront check is wiped out by the lower payouts.

Nov 12, 2006 8:09 am

ARE the payouts "so much worse" as MS?  I thought all the wirehouses were pretty similar.

Nov 12, 2006 5:50 pm
Lex123:

ARE the payouts "so much worse" as MS?  I thought all the wirehouses were pretty similar.



The grids vary from place to place depending on what level of production that an advisor achieves, but for the most part, I don't think that it's the grid that causes an advisor to leave one firm for another.  After all, the grids change too.

Nov 12, 2006 10:35 pm
Lex123:

ARE the payouts "so much worse" as MS?  I thought all the wirehouses were pretty similar.

You're right the payouts are pretty similiar. I think Merrill is probably the lowest, followed by Smith Barney, MS, UBS, & Wachovia in that order. Wachovia is probably the highest paying wirehouse. Wachovia also has several diff platforms, some of which rival the indys in payouts(+/- 90%!). I actually question if the traditional wirehouse platform will be economically viable much longer. I continue to think that many FA's will continue to migrate to the more flexible independent platforms. That is unless the wirehouses wake up, like Wachovia did, and get more flexible. I actually think that MS has woken up, but they seem to be reacting very slowly, hence the revolving door analogies.   

Nov 13, 2006 9:32 am

BondJamesBond:

But they are moving in this direction at such a slow pace it is hard to be sure. Hence, your indecision. Mgmt really needed to make a bolder move, more along the lines of the Wachovia model.

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Why? Perhaps WB has figured out something the rest of the industry hasn't but let's look at what they've done. They have the bank channel the wirehouse will not be cloning. They have the stand-alone former Wheat First offices that don't appear different than any other wirehouse. If they are, please do explain how to us. How's the "profit formula" deal working out?


Thirdly, they have their WSFN (I think that’s the current name) and they appear to be the only “independent” model in the industry that’s paying recruiting bonuses. It’s hard to fault the other warehouses for not following WB on this one until they prove it can work.


BondJamesBond:

Wachovia has so many different ways to access their platform, why would an FA ever leave?    


You might seek an answer to your last question by talking to the dozens of established WB brokers that have left for MS, among others.


Could it be this has something to do with it?


http://www.researchmagazine.com/cms/Research/Monthly%20Issue s/Issues/2006/06/Index/Research%20Reporter/06wirehouse-wacho via?searchfor=danny+sarch


The tweaks Wachovia made to its ’06 deferred-bonus plan caught the attention of Dow Jones in mid-December, which said at www.wsj.com that the changes are “infuriating” some brokers.


Nov 13, 2006 9:38 am
Lex123:

I don't work at MS, but from everything I've read about the new comp plan, there was a slight INCREASE in payout (especially if you gross more than 500k). I don't know why brokers would be leaving if this was the case (unless you are talking about low producing brokers.) 



You're right, there was an increase and they (brokers) won't be headed to the door as a result of it. Remember who's talking here, Elvis, who predicted a cut in payout and a new round of lay-offs and Bond, who appears to be a recruiter. I think Elvis should jump ship, take the check elsewhere that he wants and stop looking for a "reason" for the move other than the check. 

Nov 14, 2006 9:52 pm

Mike,mike,mike.....I question what type of business you do. I am considered a very good broker who does both transactional and asset based business. I was confronted by my manager on how this pay out affects me and i will be down approx 3%. This of course is based upon 2005 numbers and not 2006.(They havent yet figured it out, or just waiting to year end) However if i were to get involved in the Wealth Creation plan i will be ahead of the game. So Mike, know it all,how will this affect your payout? Have you figured it out yet? Sounds like you are in managment and forgot how it is to produce real numbers. Oh, by the way i hope more brokers leave. That is the only way managment will get the messege

Nov 14, 2006 10:57 pm
Elvis:

Mike,mike,mike.....I question what type of business you do.


I could care less what a habitual whiner thinks. You’ve been making incorrect guesses about decreased payouts, new layoffs, yadda yadda yadda and when payouts are increased, you still whine.



Elvis:

I am considered a very good broker who does both transactional and asset based business. I was confronted by my manager on how this pay out affects me and i will be down approx 3%.


You were “confronted”? LOL


Here’s the deal, whiner, there’s just no way a “very good” broker is taking a 3% cut. You’d have to be doing under $300k (so you didn’t get the increase in the grid), you’d have to do a lot of heavily discounted small transactional tickets, because all transactional tickets over $500 go from Tier II to Tier I and pick up 300 bps.


Sorry, that’s just not believable.


Elvis:

However if i were to get involved in the Wealth Creation plan i will be ahead of the game.


“Get involved”? You mean if you do over $300k to qualify?


Elvis:

So Mike, know it all,how will this affect your payout? Have you figured it out yet?


Yep, leaving the differed comp aside I’ll be picking up 100 bps on Tier I and more often than not, 300bps on Tier II.


Elvis:

Sounds like you are in managment and forgot how it is to produce real numbers.


You couldn’t be more clueless, whiner.



Elvis:

Oh, by the way i hope more brokers leave. That is the only way managment will get the messege



And what would be the “message”? That some people will leave no matter how many improvements are made and their pay increased? Why haven’t you left yet? Nobody making you an offer?

Nov 14, 2006 10:58 pm

I could = I couldn't  differed=deferred

Nov 15, 2006 12:29 am
mikebutler222:

I could care less what a habitual whiner thinks... yadda yadda yadda... you still whine...LOL...Here’s the deal, whiner,...You couldn’t be more clueless, whiner...Why haven’t you left yet? Nobody making you an offer?

Wow, this isn't exactly the Oxford Debating Society, is it?? 
Nov 15, 2006 8:00 am
BondJamesBond:
mikebutler222:

I could care less what a habitual whiner thinks... yadda yadda yadda... you still whine...LOL...Here’s the deal, whiner,...You couldn’t be more clueless, whiner...Why haven’t you left yet? Nobody making you an offer?


Wow, this isn't exactly the Oxford Debating Society, is it?? 


There's a responsibility on both sides of a debate to be honest, Elvis isn't living up to his end of the bargain.



Speaking of debate, why is it you never seem to answer any questions about the Wachovia model you continue to present as nirvana, like why no other firm has followed them in their direction?


Nov 19, 2006 1:20 pm

Mikebutler, try to act mature rather than a teenager on a chat line. you have been correct on somethings but not all. Act like a professional rather than a nomad. For all i know you are just a girly man who talks big but is rather small. You dont sound like a producer, because you dont have the same concerns like one in production, earning doller after doller. Sounds like you have it too easy. By the way i am a very respectable broker, and speak as such. Dosent makes a different if your 500k or 1million plus. The are all respectable and should be treated as such . Why should you be so cocky?

Nov 20, 2006 8:20 am
Elvis:

Mikebutler, try to act mature rather than a teenager on a chat line.


This from the guy who's made a series of bogus predictions, distorts the increased grid and is now obviously sore about it all..


Elvis:

By the way i am a very respectable broker, and speak as such.


LOL, sure you do, being "confronted" by your manager and all...


Elvis:

Dosent makes a different if your 500k or 1million plus. The are all respectable and should be treated as such . Why should you be so cocky?


I wonder if your low-boil rage at your lack of success can be attributed in any way to your language skills deficit….

Nov 21, 2006 8:03 pm

HAHAHAHAHA, i just found out who you are!!!


You must be a sales assistant!! In fact everyone in my office was cracking up on who you might be, and someone who you know told me that your nothing but an assistant. This would explain how a paper pusher would know certain things, but is not a player.

Nov 21, 2006 9:18 pm

Elvis,


Im not a fan of MB but you, my friend, are a dope.