Not Indispensible

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Oct 29, 2008 9:17 am

Why should anybody who works at a brokerage firm be given anything simply because the ownership of their firm changes?



If Merrill had not been bought by BAC, brokers at Merrill would be
putting one foot in front of the other just like brokers at Merrill
have done for close to 100 years.



But because there is a change in the ownership of the firm  every
jackleg in the place feels entitled to be given hundreds of thousands
of dollars for no reason at all.



From where I sit, Merrill Lynch brokers should be damn glad they have a
job and offer to give back some of what they've gotten over the years
as a display of gratitude for having been offered a job in the first
place.



If I were still a voice to be heard I'd be urging BAC to fire all of
them then accept resumes and applications for those who were suddenly
unemployed.



If you believe your clients are yours you don't understand.  What
do you suppose they would do if you got hit by a bus this afternoon?



You are not indispensible--nobody is.

Oct 29, 2008 10:16 am

For a free market guy you sure sound like a socialist on this issue, putsy.

You keep groaning on and on about FAs should be glad they have a job.  That misconception simply highlights your 'branch administration' background.  Trainee FAs with little to no client base yet who are paid a salary may have a job.   Successful FAs who have built their own book of clients don't simply have a 'job.'   Unless you grasp this critical distinction, all your conclusions that flow from it will be faulty.

FAs may be employees legally, and the clients may also (in most cases) be legally considered clients of the firm rather than the FA.  But clients never waive their legal right to choose to do business with whomever they wish - regardless of what any B/D contract says.  This is still the USA.  Reality has demonstrated time and time again that - in practice - when an FA leaves one firm and goes to another, the vast majority of the clients choose to follow him.

It is this reality that gives successful FAs the clout they have in the (semi) free US market to essentially be free agents in the marketplace.  Their current firm - or acquiring firm as is typically the case - has absolutley no obligation or requirement to offer retention incentives.   If they choose to do so, it is because they recognize the marketplace realities that govern these free agent FAs: it is an open, competitive market.  Acquiring firms will choose to offer retention to the extent they believe it is in their best interests to retain the revenue generators they hope to retain.  It's pretty simple, really.

Complaining about this is silly.  Advocating that an acquiring firm fire all their FAs and "accept resumes and applications" from them is absurd and only makes you sound like you work in the Kremlin.  Or perhaps in branch administration.

This isn't about employee gratitiude.  No one is forcing BAC or any acquirer to offer anything to anyone.  They can fire every FA as you suggest.  They can also end up with paying billions of dollars only to lose the vast majority of their anticipated future revenues, which will move right across the street with the fired FAs.  Brilliant strategy.  Who is the one who doesn't understand?!

No one is indispensible, but as long as successful FAs are alive and
keeping clients happy, they will retain whatever clout the marketplace
dictates.

So stop railing against the free market and 'jobs.'  It is silly and only serves to highlight your distorted perspective, poor judgment and obviously bitter attitude towards those who have earned the right in the open market to choose their own destinies. 


Oct 29, 2008 10:24 am

Why should anybody who works at a brokerage firm be given anything simply because the ownership of their firm changes?


 
Morphius said it much better than I will.  The short answer is because it's in the firm's best interest.  The majority of clients of a successful FA will follow him to a new firm.  The old firm doesn't want the advisor to leave.  Therefore, they will pay him to stay. 
Oct 29, 2008 10:41 am
Morphius:


But clients never waive their legal right to choose to do business with whomever they wish - regardless of what any B/D contract says.



Apparently you've never been dragged to court from the company's domiciled state. 

Oct 29, 2008 10:47 am

I have to agree with you on this one, Put.

 
Someone buys my firm and I now have the right to moan and groan about how much they are or aren't going to pay me, via a bonus, to keep doing what I've been doing for years?
 
I think instead, I'd be doing everything I could to convince them to let me keep my job.
 
Oct 29, 2008 11:02 am
gvf:
Morphius:


But clients never waive their legal right to choose to do business with whomever they wish - regardless of what any B/D contract says.



Apparently you've never been dragged to court from the company's domiciled state. 


Note I am not addressing here the separate legal issue of restrictive covenants like a non-solicit.  I am referring to a client's right to make decisions, regardless of whatever agreements may exist between an FA and a firm.


Is there some state that you are aware of that does not recognize the client's right to choose with whom they do business?

Oct 29, 2008 11:11 am
Borker Boy:

Someone buys my firm and I now have the right to moan and groan about how much they are or aren't going to pay me, via a bonus, to keep doing what I've been doing for years?


I'm a bit confused, Broker Boy.  You have always had the right to moan and groan about your pay or lack thereof.   Are you saying you and your colleagues should lose this right if your firm is acquired? 

No one is saying you can't feel grateful for having a job.  But to criticize those who may not share your feeling of gratitude when the market offers them attractive alternatives for which they can be even more grateful doesn't make much sense to me.


Oct 29, 2008 11:18 am
Provocative Put:

Why should anybody who works at a brokerage firm be given anything simply because the ownership of their firm changes?

If Merrill had not been bought by BAC, brokers at Merrill would be putting one foot in front of the other just like brokers at Merrill have done for close to 100 years.

But because there is a change in the ownership of the firm  every jackleg in the place feels entitled to be given hundreds of thousands of dollars for no reason at all.

From where I sit, Merrill Lynch brokers should be damn glad they have a job and offer to give back some of what they've gotten over the years as a display of gratitude for having been offered a job in the first place.

If I were still a voice to be heard I'd be urging BAC to fire all of them then accept resumes and applications for those who were suddenly unemployed.

If you believe your clients are yours you don't understand.  What do you suppose they would do if you got hit by a bus this afternoon?

You are not indispensible--nobody is.

 
I agree, and said the same thing a week ago in another thread.
 
"I'm fairly certain this won't be a popular opinion, but as someone on the outside of the AGE/WB/WFC or the BAC/MER mess looking in, why do you feel you're entitled to several hundred thousand dollars just to stay in your seat (particularly you AGE guys who just had a bone thrown to you 18 months ago)? Maybe a little more gratitude that you still have a job at this point and a little more focus on the fact that your clients are getting killed by the market and are much more concerned with their portfolios than they are you, which company you work for, or which company is buying that company. Seems like that's what you get paid for. "
Oct 29, 2008 11:22 am
Morphius:





I'm a bit confused, Broker Boy.  You have always had the right to
moan and groan about your pay or lack thereof.   Are you
saying you and your colleagues should lose this right if your firm is
acquired? 

No one is saying you can't feel grateful for
having a job.  But to criticize those who may not share your
feeling of gratitude when the market offers them attractive
alternatives for which they can be even more grateful doesn't make much
sense to me.








I believe that Bank of America is being foolish offering Merrill brokers anything other than the opportunity to keep their jobs.



Other firms are hunkering down--transition packages are going to become
rarer than hen's teeth and the size and scope of them is already being
restricted due to the unknown of how reliable the trailing twelve and
other indicators actually are.



If B of A offered an accelerated payout with nothing upfront they'd
lose very little of their client base or producers because as we say
down south, "They ain't goin nowhere."

Oct 29, 2008 11:34 am

They aren't just paying brokers to stay in their seats, they are also paying for the right to sue if a broker decides to bail at a later date and take staff and clients along.

From that perspective, they're paying a premium for client retention not producer retention.


Oct 29, 2008 3:18 pm

"You are not indispensible--nobody is"

 
It is arrogance like this that has made me d*** glad I am independent. 
 
IndyEDJ
Oct 29, 2008 3:48 pm

Too much speculation or hear say here vs. facts at the moment.  

FACT- deals are NOT down-  This is so overblown on these boards! 2 major wirehouse firms have increased their cash transition packages this week alone.  1 firm cut theirs back by 10-20% depending on quintile. I won't name them, but they are indeed up overall.  Why? Taking huge advantage of the times and opportunities out there.  They are not up for everyone, in fact, FAs at <$350k or other lower quintile producers are not so welcome. But, any ML or other broker $500k or higher can get paid in a big way right now.   Will this be the same in 60 days?  I think not, but right now deals are not overall down. Deals have been CRAZY stupid, 09' will probably bring more rationality as things settle down.

When did being an FA become similar to having a "job"?  This business is far too reliant upon the personal relationships built with clients to view a seat, computer, phone and some support from any firm by any name as just a 'job'. 

Any employment market is driven by demand or lack thereof for the people who are capable of producing the results that meet whatever an employers return on investment must be.  As long as anyone is willing to pay any dollar amount to gain an FA there will have to be means to retain those same employees at their current firm. If there was no demand, there would be no retention package needed.  It's stupid to imply anyone should appreciate a job if there's greater demand for their skill sets and the production they bring elsewhere.

Oct 30, 2008 8:58 am

Spoken like someone who is either in management or someone who has no idea how clients are gathered.



Merrill and other firms can take this attitude when THEY are the ones bringing clients in the door. It is the FA who has to beat the bushes to find prospects who have a potential interest in moving from their existing firm to the new FA. It is the FA that establishes and builds the relationship. It is the FA who advises the client. It is the FA who holds the clients hands when the markets are melting down. It is the FA who keeps the client from doing harm to themselves because the markets are melting down. And finally it is the FA who keeps the client when the "firm" has its name in the news for doing things it shouldn't be doing.



Your OP line of thinking is why MER could never entice me as a broker to ever even for a second consider working for MER because you espouse the view of the FA/Client/Firm relationship. MER believes they own the relationship.. they of course are out of their minds.

Oct 30, 2008 10:01 am

Merrill doesn't want you.