Merrill To Lay Off 400 Brokers In Training Program
What’s the word at the ML offices? Have they cut everyone or just the lower quintiles? What about people who are no longer in the program?
–WM
They have been cleaning house of our trainees. Most of the remaining POA’s are gone and many of PMD’s have been released last week. I think it was because they missed their goals. It sounds like many had brought in the assets but the market has taken them below their goals.
[quote=MERRILLBANKER]They have been cleaning house of our trainees. Most of the remaining POA’s are gone and many of PMD’s have been released last week. I think it was because they missed their goals. It sounds like many had brought in the assets but the market has taken them below their goals. [/quote]
The news article hit the Dow Jones Newswires today at 3:59 today. It’s subscription only so I can’t post a link. There is even mention of reducing newer graduated advisors.
–WM
Can you cut and paste the article?[quote=MERRILLBANKER]They have been cleaning house of our trainees. Most of the remaining POA’s are gone and many of PMD’s have been released last week. I think it was because they missed their goals. It sounds like many had brought in the assets but the market has taken them below their goals. [/quote]
The news article hit the Dow Jones Newswires today at 3:59 today. It’s subscription only so I can’t post a link. There is even mention of reducing newer graduated advisors.
–WM
[quote=bullinachinashop]
Can you cut and paste the article? [/quote]I am not one to violate copyright laws, especially against my former employer. Look on the Dow Jones Newswires.
[quote=WealthManager] [quote=bullinachinashop]
Can you cut and paste the article? [/quote]I am not one to violate copyright laws, especially against my former employer. Look on the Dow Jones Newswires.
[/quote] Rules were made to be broken. See current financial situation. Everybody's doing it. Do it, do it, do it now (said in a Starsky & Hutch way).
They have done that before during a bad market. Fire all the trainees. Nice guys.
[quote=albert]They have done that before during a bad market. Fire all the trainees. Nice guys. [/quote]
You do understand that they are running a business, don’t you?
I know, but what they dont understand is that almost every bigger producer ive seen the main reason he is not doing 500K gross or less is because he stayed in one spot and leached off the accounts from trainees and younger brokers who could not or did not stick it out. If they get rid of this avenue than the bigger guys will realize they really dont know that much about how to build their business.[quote=albert]They have done that before during a bad market. Fire all the trainees. Nice guys. [/quote]
You do understand that they are running a business, don’t you?
fritz, I honestly think you’re on to something. I believe that the business is headed toward the point that only HUGE producers are tolerated at big wirehouses (and will reap the benefits as the attrition mounts. I’m afraid it will be the previously “respected” $500-650k+ folks who will simply join the ranks of the “attritted” (Yes, I made that word up. If the made-up shoe fits…)
[quote=fritz]
I know, but what they dont understand is that almost every bigger producer ive seen the main reason he is not doing 500K gross or less is because he stayed in one spot and leached off the accounts from trainees and younger brokers who could not or did not stick it out. If they get rid of this avenue than the bigger guys will realize they really dont know that much about how to build their business. [/quote] Are you serious? If say 1 in 20 trainees makes it to year 5, then that one guy obviously knows what he's doing. How does a senior broker who has built a big business doing 500k+ not know much about building a business? You're crazy. They have a big business because they built it. They were smiling and dialing and winning new clients. It's not an easy thing to consistently do.Agree with you 100% Think it may take a year or two to play out, i am not even sure the guys calling the shots know it yet since many of them do not know anything about what its really like to be in production..but do think if things continue as is, there will only be a small % of the current people at the wirehouses. Not sure what happens to the other 90% of the people (Indy, working at call centers etc) that become "attritted." Think I'll fit into that group eventually, but maybe depends on how the market does, 5000 DOW and I am ATTRITTEDfritz, I honestly think you’re on to something. I believe that the business is headed toward the point that only HUGE producers are tolerated at big wirehouses (and will reap the benefits as the attrition mounts. I’m afraid it will be the previously “respected” $500-650k+ folks who will simply join the ranks of the “attritted” (Yes, I made that word up. If the made-up shoe fits…)
I don't think this will happen to the extent you do. I would actually prefer it to, as I would have less competition, but if the wirehouse industry consolidates to only big producers, there would come a point where personal relationships are lost because the advisor has too many clients, older advisors will have retired, and no young guns would be there to prospect and bring in new money. The wirehouses will consolidate and their work force will shrink. But things are cyclical and some things will never change. This isn't new...fritz, I honestly think you’re on to something. I believe that the business is headed toward the point that only HUGE producers are tolerated at big wirehouses (and will reap the benefits as the attrition mounts. I’m afraid it will be the previously “respected” $500-650k+ folks who will simply join the ranks of the “attritted” (Yes, I made that word up. If the made-up shoe fits…)
Any confirmation of this news story? My personal theory is that ML/BofA wants to shrink the advisor force. Figured the comp plan will take out allot of lower producers, and was waiting to see what they do with the trainees.
snag,
The one factor that I think has changed (and NO, I’m not saying that it’s “different this time”).
Is that individual investors are now so ubiquitous, that the vast majority of them understand that there are different ways to get their investment advice. I don’ t think that firms like Merrill have leverage of exclusivity that they once had. Mostly, I just continue to see FCs with very profitable books being treated as though they are not profitable (enough). The past year+ on the indy side has only reinforced that notion in spades. HUGE wirehouse folks will always kill it, but their model is not the only way anymore.
Glad to see Mother Merrill is alive and well!
[quote=YHWY]snag,
The one factor that I think has changed (and NO, I’m not saying that it’s “different this time”).
Is that individual investors are now so ubiquitous, that the vast majority of them understand that there are different ways to get their investment advice. I don’ t think that firms like Merrill have leverage of exclusivity that they once had. Mostly, I just continue to see FCs with very profitable books being treated as though they are not profitable (enough). The past year+ on the indy side has only reinforced that notion in spades. HUGE wirehouse folks will always kill it, but their model is not the only way anymore.
[/quote]
Please say “african-americans” instead of “spades.” Thank you.
I apologize for the oversight and thank you for potentially saving me from HUGE liability.
Not the kind of business I want to run. How can a manager take on the responsibility of hiring a trainee and then the firm we just punts all trainees? The same firm that suggested we should find some trainees? Oh. I am sorry about that career change I encouraged you to make. I had 2 potential hires. One joined us and the other ML for a higher training salary and some sort of a "safety net". Market got bad and ML fired all the new guys including this guy. Guy that joined us same time ,and we did not just sweep anyone new, is a big producer now and a good broker.[quote=albert]They have done that before during a bad market. Fire all the trainees. Nice guys. [/quote]
You do understand that they are running a business, don’t you?
New FA’s are a huge put to firms in this bear market. Especially now a days where they have such big salaries spread over almost 3 years. When I was a newbie (only 13yrs ago) my salary was gone after about 6 mo’s. And new FA’s where profitable a lot faster because they where propritary fund distribution machines (remember B shares)!
In todays fee based world it takes forever for a new FA to be anywhere near profitable for a firm. You guys are talking about cuts - I can tell you in my branch the break even on an FA is around 350k anything under that is costing the branch money.
ABOM, Are you in Manhattan?
Personally, it looks to me like wirehouses are going to be a collection of teams. As it is, I know a few teams that operate so independantly of their BD (Merrill in this case), that some of their clients refer to them as the “XYZ Group” rather than being with Merrill. The real powerhouse teams really identify themselves by their team, rather than their BD. And I think this is the wave of the future - you either come on with a team, or you don’t come on at all. Now, it may be that you have to prove yourself to the team, but that would be the team’s issue to deal with internally. In essence, the team is responsible for the newbies performance and paying them (obviously through their added production or servicing). Not only do I think this is the way of the future, but I think it makes sense. Basically, newbies have to be “sponsored” by existing teams. Just a thought.
If powerhouse teams establish such a strong brand (a fact about which I have no doubt), why would they then settle for a sub 50% payout?
The business is definitely getting worse.
It’s not as fun as it used to be. I get tired of these cronies who mastered there chops in the 90’s act like they walk on water. I feel like I’m starting to hate the job.
Anyone notice - there is no good way to leave the brokerage business. It’s not like a normal job. The firm has to make you feel like crap on the way out. Firms always blame the brokers when things don’t work out. Sure, the young brokers have some of the blame. The firms should take a look in the mirror as well.
Sometimes I wish thing thing would get nasty enough to take a few of the fatcats down too. I don’t really wish that because then the economy would be even more horrible. I just get tired of the untouchables.
Sorry for the ramble. I feel like beating the crap out of somebody. Time for the gym.
The old under 50% payout argument.
If FA’s look at total comp (benefits, 401k match, marketing budget) not to mention paying salaries of CSA’s its a much higher payout. Also you have technology, manager (if yours does not add value than that sucks), ops department, back office, supplies (man that toner adds up), state registrations, legal, postage, real estate, etc…
Im sure the indy guys will retort this but there is a reason you find the biggest producers at big firms. It because they can focus 100% of time on wealth management and growing the biz.
ABOM, Don’t want to fight, but the “old below 50% payout” argument is only “old” because it’s always been true. No argument that most HUGE producers are with wirehouses (mostly because they’ve been in the biz for 20+ years). But, trust me, if you can, that honest-to-goodness net payout to indys is WAY, WAY above 50% (stipulating a floor at around $250k).
[quote=YHWY] If powerhouse teams establish such a strong brand (a fact about which I have no doubt), why would they then settle for a sub 50% payout?
[/quote]
For big producers at almost any firm, the total payout is over 50%. I can tell you, just at Jones, the payout (around 40%), the bonus (on $1mm producer) is probably 7-10%, the profit sharing has averaged in the 4-4.5% range, and you don’t pay for your assistant(s), your rent, utilities, software, hardware, licenses, ticket charges, seminars up to $300, basic office supplies (printer, toner, paper, fax, etc.), you don’t pay the employer FICA, your assistant’s benefits, the employer kicks in for some of your benefits, you add it all up and it compares fairly well to being independant, especially when you don’t have to do any of the bookkeeping, billpaying, etc.
The payout is smaller for small producers, so there’s more incentive for smaller producers to go indy. But at $1m+ (at all major firms), why would you want to waste your time on all that? The only way you can produce that much as an indy is with a team of people you are paying.
I’m not getting into the indy vs. captive argument, but the payout is not as far apart as some suggest.
B24. Sure was far apart for myself. I think I’ll believe my “lying eyes” over your words. End of vendetta on my part. To each his own.
[quote=Phan2om]Any confirmation of this news story? [/quote]
What? My word is not good enough? Here is the headline and author. Maybe you can find the full story.
<p =“articlehed” style=“margin: 0px;”>“Merrill To Lay Off 400 Brokers In Training Program”
A DOW JONES NEWSWIRES COLUMN
is this article true? its very believable. there was an article in wsj today about b of a firng a significant amount of senior executives. i’m in the training program but almost out of it. i also work on one of the top teams in the firm. if this article is true, i wonder how this impacts me and everyone else. oh well. i learned when i first started to control what i can control and to not worry about what i can not. despite what happens, this is still a great time to be in the business especially after the new year.
[quote=tmoney47]is this article true? its very believable. there was an article in wsj today about b of a firng a significant amount of senior executives. i’m in the training program but almost out of it. i also work on one of the top teams in the firm. if this article is true, i wonder how this impacts me and everyone else. oh well. i learned when i first started to control what i can control and to not worry about what i can not. despite what happens, this is still a great time to be in the business especially after the new year.
[/QUO MERRILL TO LAY OFF 400 BROKERS IN TRAINING PROGRAMMerrill Lynch is laying off roughly 400 brokers in training who have been with the firm between six months and two years.TE]
[quote=Swordoftruth]The business is definitely getting worse.
It’s not as fun as it used to be. I get tired of these cronies who mastered there chops in the 90’s act like they walk on water. I feel like I’m starting to hate the job.
Anyone notice - there is no good way to leave the brokerage business. It’s not like a normal job. The firm has to make you feel like crap on the way out. Firms always blame the brokers when things don’t work out. Sure, the young brokers have some of the blame. The firms should take a look in the mirror as well.
Sometimes I wish thing thing would get nasty enough to take a few of the fatcats down too. I don’t really wish that because then the economy would be even more horrible. I just get tired of the untouchables.
Sorry for the ramble. I feel like beating the crap out of somebody. Time for the gym.[/quote]
No good way to quit?
Dude…save us all the grief…go into the office tomorrow and resign. That way you there will be no reason to post your whiny drivel here any more. It’s tough out there…we’re all working through it.
This is what happens when a company giving investment advice somehow forgets how to managed their own investments. Hmmmm… seems that their is a lot of this going around. Would you give your hard earned money to an advisor representing one of these companies?
Yes. I was told there were 1500 POA’s in the company but that was before the put a freeze on hiring and it looks like they did start letting them go last week. We’ll see if there’s more to come.
This statement doesn't make sense to me. How could an office that houses numerous--or even just a handful--producers be so expensive to operate? With EDJ's business model, it baffles me that we've not yet started closing offices. It seems to me that the wirehouse model would be far more economical and easier to maintain during recessions.New FA’s are a huge put to firms in this bear market. Especially now a days where they have such big salaries spread over almost 3 years. When I was a newbie (only 13yrs ago) my salary was gone after about 6 mo’s. And new FA’s where profitable a lot faster because they where propritary fund distribution machines (remember B shares)!
In todays fee based world it takes forever for a new FA to be anywhere near profitable for a firm. You guys are talking about cuts - I can tell you in my branch the break even on an FA is around 350k anything under that is costing the branch money.
This statement doesn't make sense to me. How could an office that houses numerous--or even just a handful--producers be so expensive to operate? With EDJ's business model, it baffles me that we've not yet started closing offices. It seems to me that the wirehouse model would be far more economical and easier to maintain during recessions.[/quote][quote=ABOM]New FA’s are a huge put to firms in this bear market. Especially now a days where they have such big salaries spread over almost 3 years. When I was a newbie (only 13yrs ago) my salary was gone after about 6 mo’s. And new FA’s where profitable a lot faster because they where propritary fund distribution machines (remember B shares)!
In todays fee based world it takes forever for a new FA to be anywhere near profitable for a firm. You guys are talking about cuts - I can tell you in my branch the break even on an FA is around 350k anything under that is costing the branch money.
Don't know for sure, but they might allocate some of the corporate overhead to the branches. Attached to each broker are costs like compliance, registrations, marketing, research, etc... Maybe a BOM can chime in and shed some light on it.
This statement doesn't make sense to me. How could an office that houses numerous--or even just a handful--producers be so expensive to operate? With EDJ's business model, it baffles me that we've not yet started closing offices. It seems to me that the wirehouse model would be far more economical and easier to maintain during recessions.[/quote][quote=ABOM]New FA’s are a huge put to firms in this bear market. Especially now a days where they have such big salaries spread over almost 3 years. When I was a newbie (only 13yrs ago) my salary was gone after about 6 mo’s. And new FA’s where profitable a lot faster because they where propritary fund distribution machines (remember B shares)!
In todays fee based world it takes forever for a new FA to be anywhere near profitable for a firm. You guys are talking about cuts - I can tell you in my branch the break even on an FA is around 350k anything under that is costing the branch money.
Jones didn't have to write down (er. lose) 50-plus billion in the subprime debacle.
Also, I don't think their branches are as costly to operate as their numbers indicate.
This statement doesn't make sense to me. How could an office that houses numerous--or even just a handful--producers be so expensive to operate? With EDJ's business model, it baffles me that we've not yet started closing offices. It seems to me that the wirehouse model would be far more economical and easier to maintain during recessions.[/quote] You work from home and get paid peanuts as a trainee at EDJ.[quote=ABOM]New FA’s are a huge put to firms in this bear market. Especially now a days where they have such big salaries spread over almost 3 years. When I was a newbie (only 13yrs ago) my salary was gone after about 6 mo’s. And new FA’s where profitable a lot faster because they where propritary fund distribution machines (remember B shares)!
In todays fee based world it takes forever for a new FA to be anywhere near profitable for a firm. You guys are talking about cuts - I can tell you in my branch the break even on an FA is around 350k anything under that is costing the branch money.
Can anyone shed some insight as to how this will impact potential FA trainees/hires? I’ve been in 4 interviews in the last 3 weeks with them, meeting with everyone on up to the complex director and it has gone very well. But this news doesn’t sound good.
So, are they just kicking the lowest quintile or two or canceling the trainee process entirely until the economy rebounds?This statement doesn't make sense to me. How could an office that houses numerous--or even just a handful--producers be so expensive to operate? With EDJ's business model, it baffles me that we've not yet started closing offices. It seems to me that the wirehouse model would be far more economical and easier to maintain during recessions.[/quote][quote=Borker Boy][quote=ABOM]New FA’s are a huge put to firms in this bear market. Especially now a days where they have such big salaries spread over almost 3 years. When I was a newbie (only 13yrs ago) my salary was gone after about 6 mo’s. And new FA’s where profitable a lot faster because they where propritary fund distribution machines (remember B shares)!
In todays fee based world it takes forever for a new FA to be anywhere near profitable for a firm. You guys are talking about cuts - I can tell you in my branch the break even on an FA is around 350k anything under that is costing the branch money.
Jones didn't have to write down (er. lose) 50-plus billion in the subprime debacle.
Also, I don't think their branches are as costly to operate as their numbers indicate.
[/quote] BH, I've torn apart my P&L to verify every number. Other than the infamous "technology" costs (though I've seen the actual breakdown, which makes sense), I can verify almost every single number. But my background is in accounting, so P&L's are easy to decipher. They are legit. If I am not mistaken, don't POA's make a pretty lofty 3-year salary at ML? That's the biggest nut for them.
Heads rolled in my office today !
Out of curiosity, how many and at what LOS?Heads rolled in my office today !
Also out of curiosity, what’s the scuttlebutt regarding the Client Associates? Re-assigned to retained teams or jettisoned with their FC?
Am I safe to assume they were not on goal?Heads rolled in my office today !
2 of the 3 in my office were over goal. 3 had to go, so…
Are you telling me they let go of guys who were on goal, hit their numbers but had not yet graduated POA? That seems amazing!2 of the 3 in my office were over goal. 3 had to go, so…
i am on track to hit my goals and management says things i have nothing to worry about… did poa’s who were on track to meet their hurdles really get let go?
Amazing but true. Also the rest us were basically told our numbers are now measured monthly, no target = no security. Guess how December numbers look…
i have a friend that has been in production at ML for a year. hope he will be ok.
I know our sales manager has wanted us to always hit the monthly numbers regardless of our 3 month hurdles. My guess is that management is given a bonus from our monthly performance. What really is upsetting is that we just hired a few new PMD’s… If they are off the hook because they are in the new program, I would be so pissed… What management should do is take the successful POA’s and give them the option to stay in the POA program or enter the PMD program at a similar month. The POA program has proven to be a failure anyway.
What do all these acromyms me PMD, POA…POS lol…
I think if ML just eliminated those jumbled letters they would be getting somewhere!
PMD is the new training program that started in March of 2008, or around that time.
POA is the training program that started in January 2002 to March 2008 POS, Don't know about this one.all these “modern” training programs at ML have been miserable failures. the firm probably loses around 200-300 Myn per year on training and recruiting, and this has been a consistent number. This “new age” training philosophy is like welfare: once you get on it, it’s hard to get off. The old days were more efficient: hire talented people, give them an opportunity, and a short time to make it. Those that failed didn’t cost the firms much money; those that made it were profitable early (and on track early to bigger production).
I know, I know, I hear about how the business is "different" today, how people need more time, etc., but to me, it's always been about hiring the good talent...creme rises to the top...But, like all other things in life, to do the "right" thing requires allot more effort- something most managers gave up long ago for the sake of expediency and checking off their management boxes.A few details I know so far…
My office lost three POAs on 12/5. Two were in the program still, not meeting numbers. The other was out of the program but didn't graduate (never reached the final number and was a low draw). They are not letting go PMDs as, since the program is so new, few are even to the point of not meeting hurdles as yet. The program began in February/March and those who are live have been told that there are monthly numbers to consider and that those not making it to month 8 having met the hurdles will be asked to resign/let go. Also, those of us POAs that are left (we're down to 7 in my office/a few more in the complex) will also be held to that 8 month mark, even though it's not specifically noted in our program guides (which it is in the PMD guide). Apparently, the 8 month mark is when the trainee is officially costing the firm money. That's what I know. Now, back to prospecting...[quote=buyandhold]
[/quote] BH, I've torn apart my P&L to verify every number. Other than the infamous "technology" costs (though I've seen the actual breakdown, which makes sense), I can verify almost every single number. But my background is in accounting, so P&L's are easy to decipher. They are legit. [/quote] Won't argue with that. I'm not a conspiracy theorist and I don't even look at my PNL. ... I just don't think we're (new FAs) are the 'put' the some people say. If a firm hires 10 and two make it, wouldn't the future revenue provided by the two succesful ones easily pay for the training costs of the eight who failed? And even the eight who fail bring in SOME clients who provide future revenue and/or provide a boost for the next FA to make it. Using a sports analogy, if the Los Angeles Dodgers wanted to save a few dollars, they could just release all those minor leaguers who don't produce any revenue and just sign free agents. Probably would be a major hole in their major league team in a few years, though. [/quote] I have no idea what you mean in that sentence above. But as for the rest of your theory, I'm not sure it's all about the money to Jones (despite what people think). I think it has much more to do with protecting themselves from FA's leaving as soon as thay find a better offer, or as soon as things get tough, jump for another salary somewhere else. And Jones is not the only firm that has these in place. In reality, you HAVE to make it tough for them to leave. To piggyback your analogy above - it's why pro athletes haev contracts. Otherwise, everytime someone got a bigger contract, everyone else wants to either go somewhere else for bigger money, or re-up their contract. There ARE significant costs involved in recruiting, hiring, training, openeing an office, and paying salary/bonus to a newbie. If they go through a year or so, and decide "hey I'll just go to Merrill and get in the POA program and draw another salary", well, Jones just lost a huge investment. After all, every firm DOES invest in you to some degree. They expect to either recoup some of that investment (keep someone long enough that they "got their investment back", "sell at a loss" because the FA didn't work out, or make a good return (an FA that works out well). Obviously, they want all of them to be "ten baggers" (stealing a Peter Lynch term), but that's just not reality. And a guy out one or two years is not leaving behind much, if anything for the firm, as he either failed (and thus underperformed), or is taking any good clients he had with him to another firm.I think it's a phenomenal time to be gathering assets. However an individual in the Merrill PMD program who brings in 20mm in cash or dead assets gets no credit towards his/her hurdles. Only annuitized assets count. When you factor in the PC hurdle you are essentially forcing the FA/PMD to use C shares regardless of what's in the client's best interest.
I don't think the training costs are THAT significant. .... Of the $70,000 training cost total they throw around, most of that is guaranteed salary for training and the first year. I guess they could pay newbies zilch, but a) that's against the law, and b) even fewer qualified people would apply. .... Most of Jones training is free -- it's provided by field trainers and mentors. There is no way that seven weeks on the phone to St. Louis, followed by three or four week-long classes costs $70k. Heck, you could send somebody to State College U for that.
Anyway, the whole thing must appear silly to an finacial service industry outsider. If GE or Proctor & Gamble hires you, they don't ding you for expenses on the way out if you quit or fail. And they don't look at your salary in the first years as a 'training expense', even though realistically, you're probably not worth it until several years down the road. .... If ML wants to prosper and grow, it can't be running off trainees.I voiced the same sentiments about Jones’ exorbitant $75k in “training costs” a while back. My college degree cost about that, and as we’ve discussed in a previous thread, the majority of a new broker’s training is in the form of self-study and independent research.
If I'd finished college with the same amount of knowledge about my major and minor as I've received in industry-related "training" from Jones over the past few years, I'd be suing my university for a refund. Instead, you leave Jones, and they sue you. I believe it was Spiff who provided a laundry list of reasons why the $75k is a bargain. I'd imagine he's typing in tandem with me in response to your post. Stay tuned...[quote=buyandhold]
I don't think the training costs are THAT significant. .... Of the $70,000 training cost total they throw around, most of that is guaranteed salary for training and the first year. I guess they could pay newbies zilch, but a) that's against the law, and b) even fewer qualified people would apply. .... Most of Jones training is free -- it's provided by field trainers and mentors. There is no way that seven weeks on the phone to St. Louis, followed by three or four week-long classes costs $70k. Heck, you could send somebody to State College U for that.
Anyway, the whole thing must appear silly to an finacial service industry outsider. If GE or Proctor & Gamble hires you, they don't ding you for expenses on the way out if you quit or fail. And they don't look at your salary in the first years as a 'training expense', even though realistically, you're probably not worth it until several years down the road. .... If ML wants to prosper and grow, it can't be running off trainees. [/quote] BH, you're missing the whole point. I don't think you quite get it. DO you realize what the cost of the entire recruiting/trianing department is? If everyone stuck, they would only need about 1/4 of that department. Do you know what they spend to fly all those newbs out 3 times, put them in the crummy hotel, and feed them? Open an office, outfit it, pay a BOA, etc.? Pay their salaries, benefits, etc? Licenses, exam costs, Dude, add it all up, and it's a TON of money. And almsot no newbs make any money for the firm in their first year or two. And it is NOT just at Jones. It's NOTHING like GE or PG or whatever. All the brokerage firms are basically providing seed money to their investments. Dude, I'm not defending Jones, or the practice in general. I'm just telling you from a pure financial standpoint, the investment is HUGE.True, but PG, GE, JNJ actually give their employees more than a desk and a phone. Mentors are assigned. They take time to develop talented people and give them time to build relationships. They understand that great accomplishments can take more than 90 or a 120 days…
[/quote]
BH, you're missing the whole point. I don't think you quite get it. DO you realize what the cost of the entire recruiting/trianing department is? If everyone stuck, they would only need about 1/4 of that department. Do you know what they spend to fly all those newbs out 3 times, put them in the crummy hotel, and feed them? Open an office, outfit it, pay a BOA, etc.? Pay their salaries, benefits, etc? Licenses, exam costs, Dude, add it all up, and it's a TON of money. And almsot no newbs make any money for the firm in their first year or two. And it is NOT just at Jones. It's NOTHING like GE or PG or whatever. All the brokerage firms are basically providing seed money to their investments. Dude, I'm not defending Jones, or the practice in general. I'm just telling you from a pure financial standpoint, the investment is HUGE. [/quote] The firm is growing, it's profitable. So obviously this HUGE investment in Sloppy Joes at the training center is paying off for them. If you are growing your business this way, it's low class to go after washouts for their training costs, imo. If it's really not working for them, then they should try a different business model. ... Btw, I don't think that opening an office is a TRAINING cost, especially in that if one broker washes out, another one takes it over. That moves the firm along, imo. Keeping it light, feeling no sympathy for EJ (even though I do like my firm.)You got your shift key fixed!
[quote=Borker Boy]I voiced the same sentiments about Jones’ exorbitant $75k in “training costs” a while back. My college degree cost about that, and as we’ve discussed in a previous thread, the majority of a new broker’s training is in the form of self-study and independent research.
If I'd finished college with the same amount of knowledge about my major and minor as I've received in industry-related "training" from Jones over the past few years, I'd be suing my university for a refund. Instead, you leave Jones, and they sue you. I believe it was Spiff who provided a laundry list of reasons why the $75k is a bargain. I'd imagine he's typing in tandem with me in response to your post. Stay tuned...[/quote]In a free market, the seller gets to choose is price. If noone accepts it, they need to lower the price until the highest bidder agrees to the price. EDJ set their training price at $75,000. You guys agreed to pay this price if you leave early. Not only did EDJ think it was worth $75,000, but so did the rookies who signed their names to a contract that stated that price.
What's so freaking hard about this? Did any of you babies ask them to break it down up front? No, you didn't. So, quit your whining.
I know in the ML training, you sign a document stating that you will pay back the cost of training but, to my knowledge, no one has been held to this in my complex, even if they leave on their own accord.
ice ice baby......
Madoff's clients are complaining too.....Cancer patients complain....these folks bring these calamities on themselves I assume.....
As Tony Robbins says you are what you chant.....or what you affirm like Stuart Smalley who is going to be a Senator from Minnesota!There have been some POA’s that have left in Arkansas who were sued for the Training cost once they left Merrill.
Can the companies go after you for training costs even if they let you go? Or only if you leave of your own accord?
[quote=jmatt]Can the companies go after you for training costs even if they let you go? Or only if you leave of your own accord?[/quote]
They don’t reward bad behavior with forgiving your debt. If they let you go because you can’t produce, they’ll probably leave you alone.
If they let you go they can’t go after you for training costs. Some states are considered “right to work” states and they would have a tough time going after you even if you left of your own accord…
This story is just another sign that the traditional, big firm minded brokerage firms are dead. Combine this ML story with Motorola and others cutting 401k matches and pensions and it only cements the fact that you can't leave your future up to some bean counter.
If a POA never signed a contract, can they still try to recoup training costs from you?
What they ‘can’ do I don’t know. That’s a question for an attorney if you are concerned. But, what they have done and are likely to do? Nada! POAs are either getting cut or leaving in droves and ML or BAC is not going to spend $10000s chasing small dollars.
You are exactly correct. During the worst market in many years, I was bringing in assets. Unfortunately, not fast enough for Merrill Lynch. I had a client appointment to bring in a Million dollar 401K on Thursday. Unfortunately they let me go on Monday. I had several people who wanted to get through the holiday season and deal with their finances in January.
I've brought in more assets this year than the Vice President who sits next to me. He told me that he inherited all of his accounts and he also churns them.
That was my first question. I was told they will not try to recoup training costs.
[quote=EXMerrillFA]
You are exactly correct. During the worst market in many years, I was bringing in assets. Unfortunately, not fast enough for Merrill Lynch. I had a client appointment to bring in a Million dollar 401K on Thursday. Unfortunately they let me go on Monday. I had several people who wanted to get through the holiday season and deal with their finances in January.
I've brought in more assets this year than the Vice President who sits next to me. He told me that he inherited all of his accounts and he also churns them.
[/quote]So...what was your screen name before you signed up as EXMerrillFA?
POA’s!!
Does anyone know how the non-compete clause works? What is says? And what they can go after if you have roughly $13M AUM and go to an independant.. I lost what I signed and am interestedBella,
What month are you in?[quote=Phan2om]Bella,
What month are you in?[/quote]In case you care, I'm in December.
Your wife’s name is December?
I believe that they are terminating trainees with 6 months or more of a production number.
In our office we have let go all most all of POA’s and many of PMD’s. Even the ones that had met their goals, but fell behind because of the market. My best advice is to have a backup plan. You don’t want a termination on your record. In our city Morgan Stanley is hiring, so Wachovia and Smith Barney was hiring but that may have changed. You can talk to your clients about the changes and prepare them for the move, i.e. “With the merger of Bank of America I have began exploring other options that I feel will be a better fit you”. Or something along those lines.
not in poa…los 5
Bella-
Whats your production and mix?
Bella,
You are LOS 5 and out of POA- you have nothing to worry about except moving your book. PhanBut is there a non-compete clause if I go to a indy because they don’t particapate in the protocol? What is the non-compete for poa’s
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