Danny Ludeman, head of Wachovia Securities, told managers earlier today that financial advisors would not receive any retention bonus. He will hold a conference call with financial advisors at 1 p.m. central time, said Wachovia spokesman Tony Mattera.
In addition, Wells Fargo will rename Wachovia Securities as Wells Fargo Advisors. For financial advisors' reactions at Wells/Wachovia, got to Registered Rep. magazine's advisor forums, http://forums.registeredrep.com/forum_posts.asp?TID=7792&PN=318. Also, for some angry rants against Ludeman, go to http://forums.registeredrep.com/forum_posts.asp?TID=7792&PN=318.
“In the current environment, many of our industry’s conventions that had been adhered to for a long time are being questioned,” Mattera said. “With this whole ‘Wall Street greed’ [reputation], we just didn’t seem the right thing to do.” Mattera added, “We looked at it carefully and for a long time.”
The historical reason for offering retention bonuses, Mattera said, was to compensate brokers for the “disruption” to their business caused by a change of control. A.G. Edwards reps, for example, got a retention bonus to compensate them for having to learn new back office systems, Mattera said. Legacy AGE reps just now completed that transition—20 months after being taken over by Wachovia.
Instead of a one-time retention payout, Mattera said the firm would re-invest the money into the firm in “better ways to make Wachovia a compelling place to stay” and to work. For example, management will announce additional incremental income payouts in its Forefront Program, which, Mattera noted, is “client focused.”