BofA will cut Merrill Comp

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Oct 20, 2008 1:19 pm

Attn all Merrill Brokers:

 
Did you see Ken Lewis  on 60 minutes tell you that you were making too much money and that he was going to bring it "in line" with bank comp?
 
You may enjoy a quasi independent status outside the bank and enjoy 25% less pay because you a with the "best brand in the world"....
 
You will enjoy annualized comp and all stock bonuses. You will enjoy many other colleagues getting their mits all over your book.
 
You will absolutely love the beauracracy of a Pentagon sized corp that is now partly owned by the Govt.
 
I am betting you love it so much you go Independent and you better do that before you sign that lovely non compete.
Oct 20, 2008 1:26 pm

Old mother hen, what will this do to the comp packages of the old school options traders? How will they get paid for delivering financial advice and service?

Oct 20, 2008 2:32 pm

BofA will just do what WS did...slowly boil the frog.  They won't do anything too drastic in the near term.  They'll give MER brokers something and then leave them alone for a while.

Oct 20, 2008 3:34 pm
Getthere:
 
Transactional trade comp will be reduced to 10-20% payout, probably.
But you will participate in one of the best benefit programs in the world, or so I am told.
And, you will share in having a great reputation for helping to develop the ARS market, you old pioneer, you.
Oct 20, 2008 3:47 pm

Gracias,

consideren seriamente la posibilidad de bull Merrill.
Oct 20, 2008 3:54 pm
daytradah:

Attn all Merrill Brokers:

 
Did you see Ken Lewis  on 60 minutes tell you that you were making too much money and that he was going to bring it "in line" with bank comp?
 
You may enjoy a quasi independent status outside the bank and enjoy 25% less pay because you a with the "best brand in the world"....
 
You will enjoy annualized comp and all stock bonuses. You will enjoy many other colleagues getting their mits all over your book.
 
You will absolutely love the beauracracy of a Pentagon sized corp that is now partly owned by the Govt.
 
I am betting you love it so much you go Independent and you better do that before you sign that lovely non compete.
 
Thanks, just a few more things....
 
Who will when the election ?
Who will win the Super Bowl ?
What will the Dow do in the next 5 years ?
When can we expect a cure for cancer ?
 
Oct 20, 2008 4:31 pm
rocky:
daytradah:

Attn all Merrill Brokers:

 
Did you see Ken Lewis  on 60 minutes tell you that you were making too much money and that he was going to bring it "in line" with bank comp?
 
You may enjoy a quasi independent status outside the bank and enjoy 25% less pay because you a with the "best brand in the world"....
 
You will enjoy annualized comp and all stock bonuses. You will enjoy many other colleagues getting their mits all over your book.
 
You will absolutely love the beauracracy of a Pentagon sized corp that is now partly owned by the Govt.
 
I am betting you love it so much you go Independent and you better do that before you sign that lovely non compete.
 
Thanks, just a few more things....
 
Who will when the election ?
Who will win the Super Bowl ?
What will the Dow do in the next 5 years ?
When can we expect a cure for cancer ?
 
 
Here goes nothing:
Barack Obama
Pittsburgh Steelers
13,000
Yes
Oct 20, 2008 10:56 pm

Recruiters are going after the Merrill sales force. With MER stock down so much, they are not losing much deferred comp to transfer to another firm. If BAC does not want to give the reps a competitive payout, the best ones will move to a firm where they can get paid or go indy.

Oct 20, 2008 11:07 pm

I have to let you guys know as someone on the other side of the fence that BAC will NEVER, and I mean NEVER at any point integrate another financial company of any kind without screwing it up and creating massive red tape for all parties involved. They nearly destroyed Schwab in the 80s. The bank side employees all resented the brokerage guys and saw them as overpaid divas. They referred to their customers as holding "Slob accounts."



How do I know this? I worked on the bank side at BAC when beginning my career before getting licensed. I can tell you that not only did I never once in my entire time there referred a single client to a BAC Investment rep (instead creating an index card for my own next gig...), neither did a single one of my colleagues in the department I was in. As I inquired of other more senior employees on how to get into the investment wing, you'd be surprised at how many were not even aware that one existed!



Trust me when I say that Merrill Lynch will be seen as an overly expensive third wheel at BAC, the clients of which will be picked over by every other wing of the bank for lending and deposit based products, if not securities as well.

Oct 22, 2008 3:05 pm
illinoisrep:

Recruiters are going after the Merrill sales force. With MER stock down so much, they are not losing much deferred comp to transfer to another firm. If BAC does not want to give the reps a competitive payout, the best ones will move to a firm where they can get paid or go indy.



Recruiters are all over the place. You don't know HOW annoying it is to get ahold of a broker who has just been contacted by a bunch of idiots from MJ and MkKay or the other recruiting mouse houses out there. I swear to god they have to be using scripts and have absoloutley no idea what "trailing 12" or "AUM" means.

These people give the real, good recruiters a bad name and make our job that much harder.

Oct 22, 2008 7:08 pm

I am a ML FA and I can honestly tell you that I am getting no fewer than five calls per day.  Two competing Smith Barney branches call nearly every day, one guy saying their branch is better than the other (I'm not joking).  Wachovia even called last week....why would I go from one place in the news to another place in the news?  Where were these guys last month?  Anybody thinking of leaving should have done his/her due diligence weeks ago.  I'm staying, because there's no better place for my business and I'm probably looking at a low six-figure retention bonus which is plenty for me to stay in the same seat I was going to be in anyhow.  The place will be different but it will still be the leading wealth management wirehouse in the world.  The indy route is tempting but I need more time to get that set up.

Oct 22, 2008 7:35 pm
cubfan1404:

I am a ML FA and I can honestly tell you that I am getting no fewer than five calls per day.  Two competing Smith Barney branches call nearly every day, one guy saying their branch is better than the other (I'm not joking).  Wachovia even called last week....why would I go from one place in the news to another place in the news?  Where were these guys last month?  Anybody thinking of leaving should have done his/her due diligence weeks ago.  I'm staying, because there's no better place for my business and I'm probably looking at a low six-figure retention bonus which is plenty for me to stay in the same seat I was going to be in anyhow.  The place will be different but it will still be the leading wealth management wirehouse in the world.  The indy route is tempting but I need more time to get that set up.

 
 
Good decision.  There is, and will always be, a reason why the big hitters are always with the wirehouses.
 
The Indy channel is not a long term solution.  Within a matter of years there will be a few major firms, owned by banks, and they will have close to 100% of the business.
 
The Indy channel will be put down with massive advertising asking investors where they feel more comfortable when it comes to financial advice--a bank or Bob's Carpet Cleaning and Finiancial Advisors?
 
The entire industry is ripe for reorganizing.  If you're at a premier firm now---STAY THERE and be glad you've already arrived at what will most likely be the only place in five years.
Oct 22, 2008 7:38 pm

And surely investors will be receptive to marketing campaigns by big banks, right? Everyone loves banks, right up there with attorneys and the IRS. I am not indy but I think that avenue is exploding in growth as we speak. I saw today that a ML team with 900 million AUM left to go indy within the last week.

Oct 22, 2008 7:47 pm
Provocative Put:
cubfan1404:

I am a ML FA and I can honestly tell you that I am getting no fewer than five calls per day.  Two competing Smith Barney branches call nearly every day, one guy saying their branch is better than the other (I'm not joking).  Wachovia even called last week....why would I go from one place in the news to another place in the news?  Where were these guys last month?  Anybody thinking of leaving should have done his/her due diligence weeks ago.  I'm staying, because there's no better place for my business and I'm probably looking at a low six-figure retention bonus which is plenty for me to stay in the same seat I was going to be in anyhow.  The place will be different but it will still be the leading wealth management wirehouse in the world.  The indy route is tempting but I need more time to get that set up.

 
 
Good decision.  There is, and will always be, a reason why the big hitters are always with the wirehouses.
 
The Indy channel is not a long term solution.  Within a matter of years there will be a few major firms, owned by banks, and they will have close to 100% of the business.
 
The Indy channel will be put down with massive advertising asking investors where they feel more comfortable when it comes to financial advice--a bank or Bob's Carpet Cleaning and Finiancial Advisors?
 
The entire industry is ripe for reorganizing.  If you're at a premier firm now---STAY THERE and be glad you've already arrived at what will most likely be the only place in five years.
 
"If you're at a premier firm now"  What the heck are you talking about?  Which one is premier, they all went bankrupt or needed a govt or foreign bailout to avoid being bankrupt.  Wish it was not the case, but it is what it is, all these places are taranished nearly beyond repair, 2009 earnings will show this clearly.
Oct 22, 2008 7:49 pm

I sort of doubt your comment about wirehouses vs. indies. I think there has been no better time to be indy. Now, I agree that the one-man-band LPL guy will never compete for the big money. But there are more and more wirehouse teams creating their own wealth management firms and doing it right. And it seems to me that it is becoming more and more appealing to investors to go that route rather than risk it with the big bank houses. Unfortunately, the investment banks' greed have killed it for the wealth management divisions. The other advantage is that many of these wealth management firms can now become more focused and re-brand themselves based on what client base they want to target, rather than just being known as the Dorfman-Peters team at Citi Smith Barney, or the DFGY Wealth Management Team at Bank of America Merrill Lynch, or the Dream Team at AGE Wachovia Wells Fargo Asset Management, or the ABC Team at Morgan Stanley Okinawa Bank NA.

Branding has become/will become a bigger issue than most think.

Oct 22, 2008 7:51 pm
Gordon Gekko:





And surely investors will be receptive to marketing campaigns by big
banks, right? Everyone loves banks, right up there with attorneys and
the IRS. I am not indy but I think that avenue is exploding in growth
as we speak. I saw today that a ML team with 900 million AUM left to go
indy within the last week.








There are very few Indy practices with 900 million AUM. 
Additionally, even 900 million can leave.  Nothing is cast in
stone.



You're naive beyond belief if you don't believe that Bank of
America--who already does business with 50% of the nation, could not
suck 900 million out of an indy shop if they want to.



One of the biggest mistakes any sales person makes is to conclude that
their relationship with any given client is bullet proof.  I've
seen parents transfer their account away from a child--I'm aware of
wives who will simply not do business with their  husband's firm
and on and on.



The concept of the Indy producer becomes particularly suspect when the
markets are volatile.  The 900 million dollar Merrill team that
left will come to realize that a portion---perhaps a large portion--of
those AUM will become uncomfortable and decide that Bank of America
would be a better fit.



The reality is that we all like to complain about banks , but when push
comes to shove they're going to win most of our business.



As this financial disaster unfolds investors are going to be made more
and more aware of the various tiers--the caste system--among their
sources of investment advice, custodianship and so forth.



There is no way in hell that an outfit called LPL Fiinancial Services
will be able to stand up when the client is considering them or Bank of
America.



You know I'm right.  You hate to hear it, but you know I'm right.

Oct 22, 2008 7:57 pm

Your crystal ball is awesome, pal!  By the way, the markets are volatile now (check the VIX out) and the trend is towards the indy platform. Beyond that, I am not as clarevoyant as you looking out years down the road. Who will win the election by the way, Mr. Right?

Oct 22, 2008 7:59 pm

LPL is looking pretty good right now from my clients' perspectives.  No Investment banking, no investment inventory, no proprietary products, SIPC insurance (+ Lloyds of London insurance up to $99.5 million per account), Insured Cash Account up to $1 Million, FDIC Bank CDs, Fixed Products and Variable annuities. 

I know what you're getting at Put, but I think given the right marketing campaign, Indies can compete quite easily. 

Oct 22, 2008 8:00 pm

My point is that the dynamics have changed--dramatically. 
Investors are nervous as a whore in church and will naturally gravitate
to the household names.



Jones Mufflers and Financial Advice is meaningless.  I have a
buddy who is Indy.  I've been with him several times when he
introduces himself as being with Acme Financial Advisors, we're
associated with Raymond James Financial Services hoping to glom
onto  the RJ name.



I haven't asked him recently, but I'll be a dollar to a donut that the
prospect are saying, "Did you say you work for  Raymond James,"
which they're wondering because they know the name.



It's actually as meaningless as Joe The Plumber saying, "I have an
account at Bank of America" in an attempt to build credibility.

Oct 22, 2008 8:02 pm
gvf:

LPL is looking pretty good right now from my clients'
perspectives.  No Investment banking, no investment inventory, no
proprietary products, SIPC insurance (+ Lloyds of London insurance up
to $99.5 million per account), Insured Cash Account up to $1 Million,
FDIC Bank CDs, Fixed Products and Variable annuities. 

I know what you're getting at Put, but I think given the right marketing campaign, Indies can compete quite easily. 







Does LPL or RJFS or any of the others have the warchest to compete with Bank of America?