UBS Layoffs, Other firms too?

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Apr 21, 2009 11:49 am

Are the UBS layoffs the first real major cut of advisors you've seen recently?

We're wondering if advisor layoffs are going on at other firms (ML, SB, WF)  too, but just more imperceptibly? If so, are these cuts also based on production?

Are national firms drawing a line in the sand in terms of production (with 300 T12 and less not making it?) Thoughts?

Thanks.

Apr 21, 2009 12:08 pm

Most big firms are forcing "voluntary" layoffs through changes to their grids.  At many firms, producing under 300K is now impossible to live on.

Apr 21, 2009 12:13 pm

Merrill got rid of most of the trainees but haven't laid off any producing advisors to my knowledge. Most have left because their payout was cut severely because of the penalty box.

Apr 21, 2009 12:25 pm

Thanks! 

What is the payout, for a 50 fees/50 commissions book, for a 300K
producer...any specific examples of how this has changed (the penalty boxes) making it more difficult for these advisors to make ends meet?



What are some options for those producers? Where are they going?

Apr 21, 2009 12:43 pm

Most advisors in my office that fell into the penalty box have left and gone to independet firms where the payouts are almost tripple of what the penalty box grid is.

Apr 21, 2009 1:04 pm

How much would a 300k producer at say ML or SB bring home today than say a year or two ago?


Apr 21, 2009 1:09 pm

My guess is half, at the least.

Apr 21, 2009 1:30 pm

If they were heavily annuitized then half sounds about right.

Apr 21, 2009 7:13 pm

I'd be extremely surprised if there's not a similar 'cut' in tiers 4 and 5 coming at Smith Barney and Morgan Stanley once the deal is done end of May. Will probably happen after Q2 ends in June. It would make a lot of sense for them to trim off the bottom <$300k producers once they have 1/3rd of the retail wirehouse advisors under one roof so to speak. They've already NOT retained these FAs and more.   If they don't cut, probable performance plans, penalty box shift, etc to push advisors out the door. 

Apr 21, 2009 7:53 pm

Word is that WFC is going to be saying ADIOS to some PCG advisors on the WB Securities side.  My manager said the cutoff is either going to be at 150k or 200k for LOS > 5 years.  She was not sure if that is on the T12 or the fiscal year end but it is clearly coming very soon to a branch near you.  Really, can you blame them?  These advisors will never be any larger than what they are now at those #'s & LOS. They are only adding cost to the office and to the wholesalers by eating their lunches.  Good luck to all of you as YOU know who you are.

Apr 21, 2009 9:17 pm

After B of A cut it's training program, we were told more than once that there will be no further layoffs for FAs. This was said on conference calls earlier this year. Also, some of the payouts that were dropped for lower end producers have been raised back up recently. I don't think they would have done that if they planned to can these guys.

Apr 21, 2009 9:29 pm

Word is that WFC is going to be saying ADIOS to some PCG advisors on
the WB Securities side.  My manager said the cutoff is either going to
be at 150k or 200k for LOS > 5 years.  She was not sure if that is
on the T12 or the fiscal year end but it is clearly coming very soon to
a branch near you.
*************************************************************
I heard ISG will be showing the door to 250k and less. I also heard that they are preparing to terminate the FAIT program very soon. A lot of branch consolidation going on as they bring in new recruits from the wires and elsewhere. Very good producers are even losing branches to recruits. There really is no job security any longer even if you are producing solid #'s.

Apr 21, 2009 9:31 pm

I know someone with ML that went ot the penalty box. He threatened an atty and they backed off. Another FA from another office told me independently that they discontinued the penalty box program at his office.

 
I think the numbers were: Less than 300k = 20% payout vs. 40%... does that sound right?
Apr 22, 2009 7:58 am
FABroker1999:

I know someone with ML that went ot the penalty box. He threatened an atty and they backed off. Another FA from another office told me independently that they discontinued the penalty box program at his office.

 
I think the numbers were: Less than 300k = 20% payout vs. 40%... does that sound right?
 
Are you hearing the BOM has discretion over who is in the penalty box and who is not?
 
Thanks.
Apr 22, 2009 7:09 pm
burtonfinancial1:

I'd be extremely surprised if there's not a similar 'cut' in tiers 4 and 5 coming at Smith Barney and Morgan Stanley once the deal is done end of May. Will probably happen after Q2 ends in June. It would make a lot of sense for them to trim off the bottom <$300k producers once they have 1/3rd of the retail wirehouse advisors under one roof so to speak. They've already NOT retained these FAs and more.   If they don't cut, probable performance plans, penalty box shift, etc to push advisors out the door. 

 
Conf. Call monday with MS management and said no cuts this year for sure, probably next year too ( my guess is larger loss of brokers at SB first quarter is the reason).  But plan is to raise the penalty box or  cut payout levels to guys 300K or under, maybe little higher for LOS over 10+.  If they stay great, if not they don't attitude is the way they are looking at it.
All this garbage happening after the firms did a large part to blow up the industry is pathetic.  Try to explain to the wife wtf is going on and she just stares at me.
Apr 23, 2009 5:44 am
 
She's probably in shock. My wife is a registered nurse and I notice she has been putting in more hours since I told her about the crap going on at Smith Barney.
 
 
fritz:
burtonfinancial1:

I'd be extremely surprised if there's not a similar 'cut' in tiers 4 and 5 coming at Smith Barney and Morgan Stanley once the deal is done end of May. Will probably happen after Q2 ends in June. It would make a lot of sense for them to trim off the bottom <$300k producers once they have 1/3rd of the retail wirehouse advisors under one roof so to speak. They've already NOT retained these FAs and more.   If they don't cut, probable performance plans, penalty box shift, etc to push advisors out the door. 


 
Conf. Call monday with MS management and said no cuts this year for sure, probably next year too ( my guess is larger loss of brokers at SB first quarter is the reason).  But plan is to raise the penalty box or  cut payout levels to guys 300K or under, maybe little higher for LOS over 10+.  If they stay great, if not they don't attitude is the way they are looking at it.
All this garbage happening after the firms did a large part to blow up the industry is pathetic.  Try to explain to the wife wtf is going on and she just stares at me.
Apr 23, 2009 12:23 pm
fritz:
Conf. Call monday with MS management and said no cuts this year for sure, probably next year too ( my guess is larger loss of brokers at SB first quarter is the reason).  But plan is to raise the penalty box or  cut payout levels to guys 300K or under, maybe little higher for LOS over 10+. 
 
Did they say specifically they were raising the penalty box, or is that you guessing?
Apr 23, 2009 7:22 pm
Conrad Dobler:
fritz:
Conf. Call monday with MS management and said no cuts this year for sure, probably next year too ( my guess is larger loss of brokers at SB first quarter is the reason).  But plan is to raise the penalty box or  cut payout levels to guys 300K or under, maybe little higher for LOS over 10+. 
 
Did they say specifically they were raising the penalty box, or is that you guessing?
 
Managers said raise in penalty box coming, hard to say if it is a done deal or his interpretation.  Was confident though about no cuts.  Who knows, maybe they lied to him, but think as of April 2009 these are their plans. 
 
 4 years ago MS cut guys at <225K, then 6 months later they were hiring guys at 200K and giving them 75% upfront, after seeing that I got to wonder if anyone has a clue what their doing in this business.
Apr 23, 2009 8:26 pm
3rd ID:

Word is that WFC is going to be saying ADIOS to some PCG advisors on
the WB Securities side.  My manager said the cutoff is either going to
be at 150k or 200k for LOS > 5 years.  She was not sure if that is
on the T12 or the fiscal year end but it is clearly coming very soon to
a branch near you.
*************************************************************
I heard ISG will be showing the door to 250k and less. I also heard that they are preparing to terminate the FAIT program very soon. A lot of branch consolidation going on as they bring in new recruits from the wires and elsewhere. Very good producers are even losing branches to recruits. There really is no job security any longer even if you are producing solid #'s.



If this is true my old office is toast..only 2 or three guys left doing over 200k....well i guess that will make it alot easier to bring the straggling clients over...

Apr 23, 2009 8:44 pm
nestegg:
3rd ID:

Word is that WFC is going to be saying ADIOS to some PCG advisors on the WB Securities side.  My manager said the cutoff is either going to be at 150k or 200k for LOS > 5 years.  She was not sure if that is on the T12 or the fiscal year end but it is clearly coming very soon to a branch near you.
*************************************************************
I heard ISG will be showing the door to 250k and less. I also heard that they are preparing to terminate the FAIT program very soon. A lot of branch consolidation going on as they bring in new recruits from the wires and elsewhere. Very good producers are even losing branches to recruits. There really is no job security any longer even if you are producing solid #'s.



If this is true my old office is toast..only 2 or three guys left doing over 200k....well i guess that will make it alot easier to bring the straggling clients over...

 
Know two guys under 200k who are doing with management encouragment the forefront/envision plans to get the "retention" from wells or whoever.  Not talking big money, 40-50K for each of them..hard to imagine they were told to do this, get their "easy money" and then they get canned right after getting it??? or before??? Does not make sense to me.  Can not see how 1000's of AGE guys got retention in the past 12 months and then now they are are canned for being under 200K or 150K (and loan is forgiven)??  Nothing surprises me, but guess knowing what is going on there it would.