Prudential Securities is warning brokers currently on the lowest rung of the ladder, telling them its time to improve their production and beef up their assets, or be let go. The firm, which like many Wall Street firms has been cutting staff to cut costs in recent months, has told brokers that they have a certain length of time, which generally varies from 60 to 90 days, to improve production.
A Pru spokesman confirmed this, saying that brokers at the bottom of the fifth quintile were being given explicit production goals based on the average of a broker with their length of service. And if the broker doesn’t hit that mark in the time frame, "They would be asked to leave," says the Pru spokesman. Brokers are being examined on a case-by-case basis, the Pru spokesman said; it’s not a blanket shedding of all bottom-tier brokers, and that brokers would be working with someone in their office to help boost their production. Currently, the firm employs about 5,000 reps, down from about 6,600 last year.
Obviously, times are tough, and brokers weren’t happy about yet more bad news. "They brought over a large number of brokers, and now they’re pulling the rug out from under us," says one Pru broker who received a letter from his branch management. He says he only received one written warning about this, yet the letter was termed a "final warning."
One such letter obtained by Registered Rep. stipulates that the broker in question isn’t covering his overhead cost, and therefore must increase assets under management and revenue. They must "be at the branch at minimum during market hours" and attend all sales meetings. Another broker says his own business plan is being used as the guideline for the goals he should meet, with a more conservative estimate being used as a threshold as to whether he stays on.
Other firms have been cutting back as well, generally by targeting the brokers in the bottom tier of their own rankings.