It's believable. SB's new pay package is likely to offend people who can count. Despite the ridiculous article from this publication that there were "pleasant surprises" in the new comp agreement, it basically nets to a $12,000 pay cut for many advisors with an increase of expense account that is for the average advisor  now $6,000. It won't make a difference to the biggest producers, but to a guy making $100 - 200k a year, $12k is a lot of money. The advisors cannot hire any personnel and more and the sanctioned hiring of support staff will be heavily reviewed by management.

The net result is that SB definitely now has the most restrictive platform and one of the lowest payouts in the industry (particularly on wrap business) and the relative power of management has substantially increased. Add to that the fact that Citi's CEO is under pressure to engage in "draconian" cost cuts (according to Prince Alaweed) or face the music and this makes it very hard to retain brokers in this highly competitive environment.

Montgomery Securities, Robbie Stephens, H&Q - all prove that banks will destroy any value (e.g. drive away nearly everyone with a lick of entrepreneurship in their DNA) in an investment banking acquisition. Banks CANNOT run brokerages - there is a reason why wirehouse brokers are so relatively productive; they aren't run by banks.

Perhaps I should take Wachovia indy off my short list.

69 FA’s out of what, 14,000? That’s insignificant, unless of course they were are ballers and managed a couple billion… If that’s the case, then those upfront’s are probably pretty juicy…

What offices lost 69 brokers?

Where did you hear this?

[quote=san fran broker]

Montgomery Securities, Robbie Stephens, H&Q - all prove that banks will destroy any value (e.g. drive away nearly everyone with a lick of entrepreneurship in their DNA) in an investment banking acquisition. Banks CANNOT run brokerages - there is a reason why wirehouse brokers are so relatively productive; they aren’t run by banks.

Tom in Newton will make up for that!

Not to ruin anyone's fun, but, blaming the current management of Smith Barney is ridiculous.

What ruined Smith Barney? Let's start by balming Sandy Weil when he allowed the company to crawl into bed with Balcor to do all of those LPs that blew up and Shearson had to cut payouts to pay for the bankers' greed.

Blame Peter Cohen for buying EF Hutton sight unseen and then having Joe whathisname go on the squawk and tell the brokers that they were going to have to take a pay cut because the losses at Hutton were real money, not monopoly money and ""cause I don't want to cuuf ya here, the answer is NO! We aren't gonna raise the payouts back up after we've paid off these losses."

Blame Sandy again after he bought Shearson back for giving the 40th Street(?) Y a million dollars so that Jack Grubman's baby could get into the College prep nursery school! Oh BTW, "Take a ride with Sandy, buy the stock, and you'll be happy that your pay was cut!"

Blame investment banking for looking at the retail arm as the garbage snoot to suck money out of customer's pockets in exchange for their flawed products. How many bad ideas came out of that meat grinder over the years? Who got the blame from clients, the media and the firm? The Broker... "We're going ot have to cut back payouts because we have these massive Class Action Lawsuits to pay for." "We're going to have to cut back on payouts to pay for this massive new enforcement wing that we are being mandated to build because you dagnabbed brokers sold our flawed products recklessly!"

It's not citi's fault. They didn't even ask to own SB, they went down a primrose path with a pretty girl who turned out to have something extra "down there" as they found out after the shot gun wedding.

EZ$, if you want to know more about Wachovia Finet, you can PM me, I'll tell you what I know.

Kevin Burke’s got the scoop on the 69 who bailed. Go read his article on RR online tonight if you have interest.

[

Montgomery Securities, Robbie Stephens, H&Q - all prove that banks will destroy any value (e.g. drive away nearly everyone with a lick of entrepreneurship in their DNA) in an investment banking acquisition. Banks CANNOT run brokerages - there is a reason why wirehouse brokers are so relatively productive; they aren't run by banks.

[/quote]

Not 100% true. Wachovia has and is doing it right in it private Client group. Morgan keegan is doing a lot right too on a smaller scale.

If SB’s #'s are to be believed i.e. that their bkrs do around $500k/yr avg, than the +/- 70 lost bkrs represent $35m/yr production. This is a huge one day event. You can bet that that all SB branch mgrs are even more nervous on Fridays than they ever were before. Clearly upper mgmt, even one as brain dead as SB’s, should be able to pick up on the fact that something is clearly wrong. Hopefully other mgmts will see that cutting pay is a bad thing, and that this is not something to be attempted. Also it is quite instructional that many of the defectors went indy, not over to another wire. Maybe just maybe, the wirehouse mgmts will adopt more features of the indy platform to keep bkrs happy.      

That was a good article Kevin wrote about where they went. Bite the hand that feeds you once too often and that hand will feed someone else.

[quote=Hydeho][

Montgomery Securities, Robbie Stephens, H&Q - all prove that banks will destroy any value (e.g. drive away nearly everyone with a lick of entrepreneurship in their DNA) in an investment banking acquisition. Banks CANNOT run brokerages - there is a reason why wirehouse brokers are so relatively productive; they aren't run by banks.

[/quote]

Not 100% true. Wachovia has and is doing it right in it private Client group. Morgan keegan is doing a lot right too on a smaller scale.

[quote=san fran broker] 

The net result is that SB definitely now has the most restrictive platform and one of the lowest payouts in the industry (particularly on wrap business) and the relative power of management has substantially increased. Add to that the fact that Citi's CEO is under pressure to engage in "draconian" cost cuts (according to Prince Alaweed) or face the music and this makes it very hard to retain brokers in this highly competitive environment.

[/quote]

I didn't know they (Registered Rep) would actuallu quote opinions from this forum in Articles. (See main website)

I like your quote about lottery tickets, GP.



My opinion of lottery tickets is that the government has finally found a way

to tax stupidity.

WHat am I missing here?  What article?  Is there a new reg rep out that I havent received yet that has something on SB? 

[quote=Malcolm]WHat am I missing here?  What article?  Is there a new reg rep out that I havent received yet that has something on SB?  [/quote]

Malcolm,

This link will catch you up on the scoop @ SB

http://registeredrep.com/advisorland/career/sb-brokers-leave /

We lost three brokers from our SB office today.  Two went indy and the other was a 77 yo broker that was forced out after 40 years due to lack of production.