Msdw

I've seen FAs join since the day they were letting people go.  There have only been a few that I've noticed, but they do have the best deal on the street. 

I think once they get everything under control and "fixed" (not the right word, but close enough), they will be solid, but it will depend on which direction they go - as would be the case with any firm in the same situation (ML, UBS, SSB, etc.).

If someone is sold on MWD, now is the time to go because the deals will shrink back to normal as things calm down. 

Just my thoughts.  Could be wrong.  It's bound to happen.

They better put some effort into keeping the rest of us who are left or there's gonna be more people leaving.  I've seen SEVERAL $1,000,000+ teams leave to go to SSB, ML, & Wachovia over the past year. 

I'm furious, that MS is sucking up to the recruits and blowing off the rest of the advisors who have stuck with them through this past year of B.S. and lost clients over the bad national press.

[quote=iconsult100]

I'm furious, that MS is sucking up to the recruits and blowing off the rest of the advisors who have stuck with them through this past year of B.S. and lost clients over the bad national press.

[/quote]

Come on, MS got rid of pathetic producers and went out to recruit strong ones. If you're a shareholder you have to seen the commonsense in that move.

It makes sense, but at the same time, I completely agree with inconsult here.  You have to suck up to the recruits, but, at the same time, do what you need to do to retain the heavy hitters, otherwise you're going to see many leaving and the average production will drop again.  It's a double-edged sword.

If you aint doing over 500m, you are always welcome to leave.

[quote=BrokerRecruit]

It makes sense, but at the same time, I completely agree with inconsult here.  You have to suck up to the recruits, but, at the same time, do what you need to do to retain the heavy hitters, otherwise you're going to see many leaving and the average production will drop again.  It's a double-edged sword.

[/quote]

Big hitters come and go all the time in this aggressive recruiting environment. With all the attention MS has been getting the last nine months some guys felt it was a great reason to give clients as to why they moved and took the big check. The brokers knew it was nothing but a cover story. The same has happened to other firms and will happen again.

What would you suggest they do to retain big producers that they (and every other firm) isn't already doing?

I’m not saying they need to necessarily do anything else.  However, given the recent changes within the firm (and changes that any firm could realistically see at some point), they have to be cautious, or they will see a large defaction. 

[quote=BrokerRecruit]I'm not saying they need to necessarily do anything else.  However, given the recent changes within the firm (and changes that any firm could realistically see at some point), they have to be cautious, or they will see a large defaction. [/quote]

Mack's doing all he can to promise changes for the better (which benefit big producers most of all) in the retail arm. From what I hear big producers were pretty happy about the cuts and the changes.

I think what you're seeing is, like I said above, some guys taking advantage of the situation to have a story as to why they moved and some remaining, lower producers whining that new, big recruits are getting checks. You'd think those smaller producers would be happy with the accounts they gained from the cuts.

I got sh*t when two were cut in this office.  Granted b/w the 2 of them they maybe had 20mm in assets.

[quote=mikebutler222][quote=iconsult100]

I'm furious, that MS is sucking up to the recruits and blowing off the rest of the advisors who have stuck with them through this past year of B.S. and lost clients over the bad national press.

[/quote]

Come on, MS got rid of pathetic producers and went out to recruit strong ones. If you're a shareholder you have to seen the commonsense in that move.

[/quote]

I'm not saying anything about the layoffs... Yes, they need to replace those people, but don't suck up to a new 400k recruit, and neglect the 950k veterans who lost clients over the media storm earlier this year.  Do some things that will actually help or motivate those big producers continue to grow their business and stay at MS.

As a shareholder, I really didn't like seeing over $100,000,000 in annual revenue disappear last month, but that's a totally separate issue.

[quote=iconsult100][quote=mikebutler222][quote=iconsult100]

I'm furious, that MS is sucking up to the recruits and blowing off the rest of the advisors who have stuck with them through this past year of B.S. and lost clients over the bad national press.

[/quote]

Come on, MS got rid of pathetic producers and went out to recruit strong ones. If you're a shareholder you have to seen the commonsense in that move.

[/quote]

I'm not saying anything about the layoffs... Yes, they need to replace those people, but don't suck up to a new 400k recruit, and neglect the 950k veterans who lost clients over the media storm earlier this year.  Do some things that will actually help or motivate those big producers continue to grow their business and stay at MS.

[/quote]

Besides the check (and who's recruiting $400k producers? That's too low for MS right now) how are they "sucking up" to recruits and aside from what Mack's already done by replacing unpopular upper-tier management, bringing in new technology systems and products would you recommend.

Again, I hear nothing but happy talk from big producers. They're happy that deadwood that hurt the firm's image are gone and that Phil's left the building.

[quote=iconsult100]

As a shareholder, I really didn't like seeing over $100,000,000 in annual revenue disappear last month, but that's a totally separate issue.

[/quote]

One-time charges from discontinued operations, comp packages for departing managment types and fines. So long as they don't make a habit of these it amounts to the cost of doing business.

Why do Reps work for these large wirehouses can’t they see no matter how big they are as producers in the firm they are still nothing to a huge corporation! You are all replaceable to a firm and a client! As an Indy I can take out one of those threats!

[quote=Greenbacks]Why do Reps work for these large wirehouses can't they see no matter how big they are as producers in the firm they are still nothing to a huge corporation! You are all replaceable to a firm and a client! As an Indy I can take out one of those threats![/quote]

Your right, and the thousands of people in the wirehouse systems are blind...........could happen.

Green - I am at Merrill, I don't know if there is a better job in the entire world, than to be a million dollar producer here!! At that level, management is your best bud, and they are well aware, that you as a producer can walk with  a large portion of assetts. Wires do not make a habit of throwing there "corporate" weight around. What happened at Morgan is a result of a lot of things. I have not heard of any other brokerages laying people off, in fact Merrill just committed to increase highering.

(and who's recruiting $400k producers? That's too low for MS right now)

I agree that the larger producers w/ MS think that Mack is moving things in the right direction.  However, I know a recruit came over from another wire 8 mos. ago to my office.  He is 12yrs. in the business and has never hit 300k.  I think it's foolish to be firing someone doing $200k and giving a sizeable upfront check to someone else doing $260. 

[quote=mikebutler222

One-time charges from discontinued operations, comp packages for departing managment types and fines. So long as they don't make a habit of these it amounts to the cost of doing business.

[/quote]

Well, since the brokers are paid on what they produce.... what is the savings there?  You still have operations people, CSAs, and rent to pay.  I would really like someone to tell me the actual cost of 1 wirehouse broker.

[quote=iconsult100][quote=mikebutler222

One-time charges from discontinued operations, comp packages for departing managment types and fines. So long as they don't make a habit of these it amounts to the cost of doing business.

[/quote]

Well, since the brokers are paid on what they produce.... what is the savings there?  You still have operations people, CSAs, and rent to pay.  I would really like someone to tell me the actual cost of 1 wirehouse broker.

[/quote]

You mean the "cost" aside from having deadwood occupy an office and infect it wth low standards? BTW, what's a "CSA"?

[quote=MWD123]

(and who's recruiting $400k producers? That's too low for MS right now)

I agree that the larger producers w/ MS think that Mack is moving things in the right direction.  However, I know a recruit came over from another wire 8 mos. ago to my office.  He is 12yrs. in the business and has never hit 300k.  I think it's foolish to be firing someone doing $200k and giving a sizeable upfront check to someone else doing $260. 

[/quote]

Either you don't have his production numbers right or your manager is brain dead. I hear from friends in MS management that they never recruited people with numbers that low.

I started the thread and my numbers are significantly over 400k (almost 3x’s). Other firms ARE recruiting IRs doing less than 400k like mad right now in our area. 125% of trailing is the going rate I am hearing from several houses.

I’ve found that MWD has one of the best deals out there.  SSB, ML are all offering, roughly, 100%.  There are exceptions, though.

I too thought that cutting brokers has harges is a load of horse manure, but there are 401(k) match, ESPP, health care cost, E/O insurance, and other ancillary costs taht we don’t see.  I think I was told that firms break even at 150k. 

[quote=frumhere]I too thought that cutting brokers has harges is a load of horse manure, but there are 401(k) match, ESPP, health care cost, E/O insurance, and other ancillary costs taht we don't see.  I think I was told that firms break even at 150k.  [/quote]

150k in production means they pay the broker 50k and keep the other 100k.  I really doubt it costs more than 100k to keep that advisor employed. 

The arguement about office space, Assistants, and management salaries are all good except for one thing.... dumping 1 FA doesn't save you on any of those things.... your rent stays the same, managers aren't taking pay cuts.   You have the same bills, but less people to help pay them.

[quote=mikebutler222

Either you don't have his production numbers right or your manager is brain dead. I hear from friends in MS management that they never recruited people with numbers that low.

[/quote]

I know of 2 that went to MS with roughly 400-500k about a year ago.  The bad press hurt them a lot, so there numbers this year are down.  A lot of it depends on the location of the office.

The 125% shocks me.  They could keep a lot of the bigger producers from looking talking to the recruiters if they gave some sort of retention bonus.

The arguement about office space, Assistants, and management salaries
are all good except for one thing… dumping 1 FA doesn’t save you on
any of those things… your rent stays the same, managers aren’t
taking pay cuts.   You have the same bills, but less people to help pay
them.



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But you replaced them with a rep that is actually a growing self
motivated producer, who actually thinks a million dollars in production
is a minimal standard, and one which will be accomplished.

That's a good concept, but how long does it take to recruit 1,000 million dollar producers?  And what about the million dollar producers who are leaving now.  And what about the 400k producers who are being told "you're next" by recruiters.

I just think that in a division that is pretty mediocre anyway, you would scrape to get all the gross revenue you can get.  Why not just elimiate brokers as you find bigger producers? 

Bottom line is, Firms need senior producers 500k and up.  Anything under that around the 10 year mark will never cross that barrier for the remainder of their career.

Like you said before about recruiters, inconsult - if we're not talking to MWD reps, it's like a doctor committing malpractice.  Activity has definitely picked up.  It's not advisable for every MWD broker to run for the door, but it doesn't hurt to get your foot in the door elsewhere while they sort their ideas out.  For some, MWD will turn out to be the best place ever and they'll be happy they stayed.  Not the approach most recruiters take, but I don't want to kid myself.

[quote=iconsult100]

 And what about the 400k producers who are being told "you're next" by recruiters.

[/quote]

People buying lies have their own problems. It's hard to blame managment for that.

[quote=iconsult100]

I just think that in a division that is pretty mediocre anyway, you would scrape to get all the gross revenue you can get. 

[/quote]

Perhaps it isn't mediocre once you trim the deadwood. From what I've heard MS's rev per broker jumped up to the same level as SB after the cut. Also, there clearly wasn't much "revenue" there among those cut. Remember the TOP "producers" let go were doing $225k and most of those assets stayed and are being (presumably) better handled by surviving brokers.

[quote=iconsult100]

 Why not just elimiate brokers as you find bigger producers? 

[/quote]

And how would that process work? Over the next year and a half (or however long it took you to hire 1000+ producers at $500k or better) everytime you make a hire some national sales flunky consults "the list" (word of which would have to be held silent) and calls the bottom guy somewhere in the firm with the bad news? Hardly seems workable to me.

[quote=BrokerRecruit]

Like you said before about recruiters, inconsult - if we're not talking to MWD reps, it's like a doctor committing malpractice. 

[/quote]

You know recruiting better than I do, but it seems to me the window for grabbing MS brokers is closed. Those that survived have to be feeling good about the accounts they picked up and the changes being made. If anything I'd guess it's time for MS to be recruiting strong and for UBS, etc., to worry.

[quote=iconsult100]They could keep a lot of the bigger producers from looking talking to the recruiters if they gave some sort of retention bonus.[/quote]

I simply don't see the mass wave of exits you're talking about among big brokers. Every firm sees big producers move and the bad press MS lived through didn't help them in that regard, BUT, I'm betting what there was is over. Big producers know the business well enough to know that the big firms all have their time in the barrel. MS escaped what hit ML and SB until the Phil mess. Anyone who jumps now is leaving the frying pan for the fire.

As far as retention bonuses, isn't that what inherited accounts amount to? Has any firm, other than after a merger, offered people cash to keep their current jobs? I don't know...

The pay-to-stay approach seems more efficient than the merry-go-round that firms end up on now....SB gets a 500k guy from ML who gets a 500k guy from MS who gets a 500k gal (let's be diverse here) from SB.  The net economic gain is negative for the firms, who had to pay the brokers to move, and the brokers go through the hassle of moving.

However, it MUST be that firms know a certain large % of people will (and do) stay so that it's not in their economic interest to pay for retention...otherwise EVERY broker gets their piece once they achieve a certain level.  So the broker has to be willing to do something that others won't (pull the trigger and move) to gain the benefit.  But, it does seem that a firm could figure out how to make retention bonuses work for them since they could then lock people in--like the forgiveable recruiting loans do.

I don't think it is, yet.  You still have to see what the effects of the Gorman acquisition will look like.  There are many that see this as a potential issue and know more changes could be coming down the pipe. 

I am still working producers doing $350k/5 yr. LOS, $600k/12 yr. LOS, $700k/15 yr. LOS, etc.  Many are just sick of the press and BS that seems to keep coming.

That said, I think for many of the brokers that are going to stay, the new business model Gorman is sure to institute is going to benefit them very much.

A lot of the senior producers are from the old Dean Witter days.  I think it’s going to be tough to convince them to change the way they do business using the Mother Merrill’s Model.