New ML comp plan rumors

Any rumors about how they are treating production for a team?  I’m sure there is no way in hell they would do as UBS and pay based on the production of the highest generating team member.

RUMOR RUMOR RUMOR......the only thing we can do is wait and see exactly what it will be.  If you are correct leftml I will do thirty push ups!   Plus a 35% grid is great for BAI folk’s god knows our grid is not in line with industry standard.  Also, I just don't see how BofA would cut comp the first year and upset so many people.  Then again they have to pay for those retention checks some how! 

[quote=BAI?]

RUMOR RUMOR RUMOR......the only thing we can do is wait and see exactly what it will be.  If you are correct leftml I will do thirty push ups!   Plus a 35% grid is great for BAI folk’s god knows our grid is not in line with industry standard.  Also, I just don't see how BofA would cut comp the first year and upset so many people.  Then again they have to pay for those retention checks some how! 

OK- this is just a rumour and I doubt it’s correct, but let me just have some fun with it:

Are those cash rates or do they take the usual 10% FACAAP out of that?

I heard from multiple sources that existing BAI will still keep the “trailer” grid.  It will go away when the ML and BAI grids are aligned at the end of next year.  And I agree with BAI?, if anyone asked if I wanted to keep the old BAI grid or move to an unknown ML grid, I would take the latter.

Correct me if I am wrong, BAI FA's don't get paid on money markets, 12B-1, or CD's, is that right? They get a haircut on VA's down to the tune of 4% and 35% payout on the top end, too? I think the only thing they got a higher payout on was proprietary fee based managed account. I was there years ago but it was such a bad experience that I had to take drugs to erase those memories. Well, and I have a little drinking problem, too. But that started when I was with BAI, I just haven't quit yet.

[quote=Phan2om] OK- this is just a rumour and I doubt it’s correct, but let me just have some fun with it:

Here are some details on the new ml comp plan. All details are just rumors at this point.

No pay on households under 100k even if the client is in a fee based platform. (I know this is fact)

Flat 35% grid across all product types.

Starting at LOS 5, a 1% bump on payout for every additional 5 LOS.

Grid flips at 1.8 million to 60% payout.

I love how BAC/ML lowered the grid for all producers under 1.8 million but would not tell anyone until the new contract was signed.

Mucho, BAI Reps are not allowed to broker CD’s (you have to move the money to your “partner” so he can meet his goals). That’s taking dirt out of boss’ hole. THey DO get 12b-1’s, just at 25%. THey also get a little love on MMKTs somewhere around 5-10 Bps. Their bigger issues are no research since ole’ Ken had too much of capital markets and the BAI guys can’t recommend a stock without a “Buy”. That left around 200 stocks no one had ever heard of. I had two separate managers suggest I mark trades unsolicited to put up more business in non-fee based months.   I was amazed. I responded that I wasn’t willing to give up my license to help him hit some goal. The regulators ought to figure out a way to check that one.



Much, one more thing, always remember, you can’t lose with booze.

I heard today that the 3rd, 4th, and 5th quintile FAs are going to be, in the words of this manager I spoke with, “very unhappy.” 

I don’t know why everybody is so worried about BofA, looks like Merrill’s own management is doing a pretty good job of banging the sales force.

This thread started off with RUMORS.

Reagan you should be a motivational speaker, good job. As an aside, in general how do quintiles breakdown for LOS >5 in general. What are the levels? Just curious, always heard about the quintiles don’t know the levels. Thanks.

Will new plan be out this week?
I just got notice ALL Christmas parties are cancelled

Bondo- Thanks for the reference to page 1 ! A very intelligent post! 

I guess I should have qualified where I received the rumor. It’s from an old co worker at the ML branch where I worked. He received the info from our complex manager after he signed his contract. New comp plan should be out this week.



I do know there will be 0 payout on all accounts under 100k even if fee based. This from a member of the ACTM.

I guess I should have qualified where I received the rumor. It’s from an old co worker at the ML branch where I worked. He received the info from our complex manager after he signed his contract. New comp plan should be out this week.

I do know there will be 0 payout on all accounts under 100k even if fee based. This from a member of the ACTM.

This is honestly not meant to be confrontational.
 I think it’s very obvious where the biz is heading. There will be a few wirehouses who only tolerate huge producers and very large clients and the entire other portion of the business will be serviced by (formerly) average (and below) producers at indys and small, boutique firms. The writing’s on the wall, from where I sit, anyway. The thing I’d like to point out is that the wirehouses’ position that a practice generating under $600k (or whatever the number is at your wirehouse) isn’t profitable is simply not true (period, end of sentence).

This is honestly not meant to be confrontational.
 I think it’s very obvious where the biz is heading. There will be a few wirehouses who only tolerate huge producers and very large clients and the entire other portion of the business will be serviced by (formerly) average (and below) producers at indys and small, boutique firms. The writing’s on the wall, from where I sit, anyway. The thing I’d like to point out is that the wirehouses’ position that a practice generating under $600k (or whatever the number is at your wirehouse) isn’t profitable is simply not true (period, end of sentence).

All I could offer is a wild guess. My guess would be that Merrill Lynch will keep it’s name going forward and continue to be the premier “wirehouse”, MS could well keep its name even if absorbed, beyond that, UBS, Smith Barney??? I predict that WS/AGE will be sold, yet again by Wells…to whom, I haven’t a guess, but I don’t think Wells wants to integrate a huge brokerage unit, just my $.02. The part that nauseates me is that stand-alone brokerages were told that they needed big bank backing to complete and survive and it was the aweful, corrupt, incompetent models of the banks that have destroyed the brokerage model. (My example, of course, is that AGE was very profitable, carried NO debt, paid a solid dividend and had $2 bil in the bank and that wasn’t an aceptable and sustainable business model, now they are a piece of debris sinking on the shoulders of capsized WB. It boggles the mind.

Maybe so. If so, I certainly had no idea how deep that hole was.

I’ve been at ML for over 20yrs…so I can only speak regarding the wirehouses. My theory…Advisors are headed in the same direction as our firms. Smaller individual advisors will merge or be"acquired" by larger annuitized teams. Instead of 2 and 3 man/women teams running 500+m in assets. We will be 5 or 7 man/women teams running a few billion in assets, each advisor with there own speciality or niche… almost like a law practice. There will be senior partners and associates and the firms will leave how compensation gets spilt to team partners. This is how they just handled the rentention packages…if you were in a team, you were able to split up the package among your FA team members. The larger FA’s (getting 75% of TT) were able to give whatever they wanted to their junior partners(those who got zero or 25% of TT). Which to the credit of most of the bigger ML FA’s…they did just that(taking care of their junior members). I think if you want to be a stand alone advisor at ML doing 300k…it’s going to be rough. Being the largest team in my complex we’ve already reached out to a guy in our office who we feel is high quality, smart, and a good advisor.

That’s a fact. Sontag gave us word on Friday…

[quote=fritz] 

That’s a fact. Sontag gave us word on Friday…

No Holiday parties this year. We lost all of our deposits because we are canceling so late. 

I’d like to respond to Reagan’s comments. First, a LOT of the "rumors"
over the last few months have been true. Our manager said the talk of
the retention #s were BS. He was right…the package was worse
than the rumors for the vast majority of FAs. Second, on a lot of
discussion groups like on Marketwatch you get lots of bitter, cynical
people. I do not get that feeling at all reading these. I see curious
professionals. And many of you are quite funny. have you read the
responses to the post from 4x4 on the drug testing at MS? Who needs to
watch TV? Just grab a beer and read these.
Also, I would like to thank Phan2om for reminding us to not judge FAs by their production. We’ve got some very high quality people in our ML office that won’t be with us in 6 months. These are good guys with mortgages and families. Frankly, I’d much rather have some these lower producers as my neighbor than a few big producers I know.
I always thought I’d retire from ML afer 20+ years. Now…who knows.

[quote=leftml]I guess I should have qualified where I received the rumor. It’s from an old co worker at the ML branch where I worked. He received the info from our complex manager after he signed his contract. New comp plan should be out this week.

I do know there will be 0 payout on all accounts under 100k even if fee based. This from a member of the ACTM.

Here are a few random thoughts on the current situation at ML. Lower quintile guys are more profitable for the firm because they keep less of what they kill. The house always win. ML is doing two things wrong… They are forcing their rising stars out and forcing the lower quintile guys out. I have spoken to MS and SSMB. I am thinking about talking with UBS this week. If the shareholders vote on Dec 5th that the companies should not merge, ML will be out of business by December 6th. I will have a definitive plan B by the time Dec 5th rolls around. 

Lower producers are more profitable for the firm??? Factoring fixed costs( tel, tech, , benefits, registration, office space, e&o, etc, etc,) the break even is roughly 150k-200k. Depending on the geographic area you’re in (office space more in NYC than Kalamazoo.) it could be more.



Big producers especially fee based are always more profitable.



I’m in independent, but having been in mgmt at a wirehouse these are the facts.

It is counter intuitive but… they are more profitable to the firm because they fall lower on the grid and the house keeps more of their revenue. The only exception is if you get a guy doing an exceptionally low amount of business. 

It is counter intuitive but… they are more profitable to the firm because they fall lower on the grid and the house keeps more of their revenue. The only exception is if you get a guy doing an exceptionally low amount of business. 

[quote=Exigent]It is counter intuitive but… they are more profitable to the firm because they fall lower on the grid and the house keeps more of their revenue. The only exception is if you get a guy doing an exceptionally low amount of business. 

Fritz,
Great point! My only guess is the firm is using questionable math. If they take tons of “fixed” costs from NY and divide it by the # of FAs, they might come up with a false break-even amount on a per FA basis. But if you fire all $150k producers, I certainly don’t think this reduces their fixed costs! I’d love to see these guys in mngt a year from now. “Mmmm, we let those low producers go and were not making anymore $$. What’s up?” No Sh*t!?

Now it’s Mid December before comp plan is out! I guess they don’t want to shock guys before the BAC vote. Wow, ML has handled this fiasco really bad.

I love how the ML guys refer to their being saved by BAC as a “merger.”

Yea, got the email today that retention was being delayed until December.  Funny, my director keeps telling me how "great" the compensation plan is going to be, but it keeps getting delayed- i suspect that the compensation plan is actually "under review" from BofA, and it's not going to be so "great"

They also cancelled the Holiday Parties, but at this date we forfeit all the deposits.  Another great move.  Either cancel early or hold the party.  C'mon guys, how hard was it to drop the pom poms and make this decision???

Phan2om, they haven’t paid it yet?  I thought y’all were getting it right after you signed the agreement.

It couldn’t happen to better bunch of crooks. Merger my a$$!

[quote=Say What]Now it’s Mid December before comp plan is out! I guess they don’t want to shock guys before the BAC vote. Wow, ML has handled this fiasco really bad.


[/quote]

ML is BAC’s bitch. ML was saved from the brink of collapse. Be grateful that you even have a place to go in the morning.

No Banco, we don’t get the “bribe” until after the “merger” (LOL, Acquisition or bailout) is complete.

By show of hands: Who would have believed or imagined a year ago what the brokerage firm landscape (not to mention stock market) would look like today??
 (I am sitting firmly on both hands)

I’m beginning to think this firm is a never ending train wreck.

Only as much as Smith Barney is a bank.  No more, no less.

I really, really hope your correct, Cubfan.  If ML becomes a Smith Barney, I am cool- talking to people at BAC, i’m not so sure.  If you look at the culture at BAC, it is very, very different from ML.  Time will tell.

The timing is ingenious on the bank’s part. They had everyone sign a document when they haven’t finished changing the rules and they had strong participation. 

The new grid is in the hands of managers but they aren't sharing until the vote. Can anyone tell me what the BAC grid looks like?

[quote=kappa1997]

The new grid is in the hands of managers but they aren't sharing until the vote. Can anyone tell me what the BAC grid looks like?

I’m a bai guy and I haven’t herd anything about the grid changing. The only thing I gathered from the all hands call this Tuesday was that the comp plan would not change until late 09. How did you get your info??

BAI, they are talking about the ML side. Y’all will be merge in sometime next year. It will likely be bloody for your managers, etc and then you will have to move your clients to the ML platform complete with new account numbers, statements. I am guessing they will have to do something through DTC to move the assets from Fidelity to ML.

I got my info from well placed ML reps. We know the managers have the grid. ML was supposed to release the new grid prior to Thanksgiving. It was delayed until supposedly the 15th of December.

We are screwed at ML. Maybe not today, maybe not tomorrow but soon and for the rest of the time we are at Merrill/BofA.



The 2009 grid might not be bad, but I guarantee the 2010 grid will be.

I think we will get “worked” gradually down.  A few percentage points here, a few there.  If you fell asleep and woke up in five years, i’m afraid you would look at the new grid and say, “huh?”

I forgot to mention that our complex director stopped in my office today to chew the fat (not unusual).  He seemed very down.  Looked tired.  Looked like all the fire was gone.  Wonder if he got a sneak peek of the comp plan?

I forgot to mention that our complex director stopped in my office today to chew the fat (not unusual).  He seemed very down.  Looked tired.  Looked like all the fire was gone.  Wonder if he got a sneak peek of the comp plan?

Nobody has seen the new comp plan on either side.  You are falling victim to rumors again…

The managers will arrive in New Brunswick on the evening of the 15th and be in meetings on the 16th until 2pm. We should get the details on the 16th or 17th. Everything you hear right now is just rumor…

you will look worse.

Again - BofA will leave ML alone for almost 2 years. Then, as they have done every single time with every other M or A it will be BofA running the show. Look what happened with US Trust, the closest example and the most recent.

I can’t believe no one has leaked this. I see MS is raising payouts accross the board anounced today. UBS did the same last month. Early discussions were that ML was to do the same but we are now really worried that BAC has locked half the firms FA’s with the buy out award. Basically they can cut pay in half and nobody who signed can walk. Good luck on recruiting new FA’s with garbage payouts. When the market rebounds i am going to MS.

That is not what I heard about the MS grid.  It will increase 2% for those doing $3mm (how many of those are left) and 1% for those doing a $1mm and 20 years of service.  Everthing else is the same on the grid.  I believe there are some cuts for those doing less than $200m or $250m.

Geez,

[quote=Phan2om]Geez,

There are no more delays. Your manager’s will know by tomorrow afternoon. They are all in NJ tonight and they will get it from Sontag on Tuesday.

Word is bad news for $350k or less… basically a motivator to leave. Also hearing that nobody is going to be enthused. I’ve heard a lot of my friends at ML who were not enthralled with the retention deal say they’re waiting for good news in the comp plan. Probably going to go over like a lead balloon. We shall see. 

Have the ML Mgrs said anything why they are taking so long? This is abnormal for Mama but not abnormal for banc of amigo. They usually put out the plan on the 17th with clarification sometime in mid march into the plan year.

Alright lets hear the new grid, it was announced at 2:00 today.

I’d love to hear it as there was no mention of it in my office.  I’m sure that is good news.

No news today for us either- anyone?

Looks like ML is doing a DBS on Thursday at 4:15. We did get an email today that told us to stay off of the chat boards and don’t talk about firm policy…Ha!

Dbs?

DBS is a satellite feed to everyone’s workstations. 

Digital Broadcast System - ML TV

not to be confused with MTV. 

Ok we have the same thing just with a different name. They always have great actors who are so excited about the combined companies. Can I get some chips with the cheese… Ra Fa gooo BofA/ML

Talked to FA at a different branch around 5:30 today, his Director told him that the new comp plan will be “very unkind”.

Well of course it will. The retention was unkind in the mind of many as well. Why would the comp plan be any different at all? Does anyone really think that BofA needs all 16,000 FA’s? They are a carrot and stick company. Stick it to the under the “line” folks" and offer the carrot to the folks they want to keep. It is the same way in every single line of business they operate. They do not look at the securities business any differently than they do any other business line. There has never been anything to tell them otherwise, according to them.

Remember - they see this as a victory, and to the victor go the spoils. Look at every single acquisition they have done. Nothing changes.

Jesus, dude. And I thought I did a lot of complaining.

I am not there (anymore) - I am not complaining.  I just understand the gig and current events.

I just wanted to take this time to personally thank Merrill Lynch for loading my pipeline with fresh, warm bodies looking for a big fat check that ML couldn’t give them.


Kudos, ML! You’ve made my job easier.

I would like to take time and second you Super Recruiter, Merrill has been very good to my pipeline.

If you didn’t get a “love pkg.” from ML/BIA guess what? They still want you to come aboard (they will give you a lollypop and a pat on the back) its not YOU they want its your clients! So you get your clients moved and signedup with BIA in about 1 yr. BIA /ML will come to all the brokers that did not get the ‘love pkg.’ and tell you that your not doing enough in production and we (BIA)are going to put you on a SALARY + commision. AFTER you do a certian amount of production your commision will kick in, and it will probably work out to be close to the same net income you are now making, or not!

Interesting theory.  But makes sense.  Moving towards the “European” model. 

Comp plan will be announced via DBS at 4:15 Thursday.  Stay tuned.

Rumor has it the managers back from the meeting in NY are now calling meetings with all FA’s who will be put on the 17% payout. They need to meet with them before tomorrows 4:15 CC. I still don’t know what the grid looks like. Wishing someone would post the numbers, we know you know…Whoever you are…

kappa 17% payout? Holly $hit I sure hope your wrong for those poor SOB’s that will be bent over on that deal.

17% is waaaay.

More details please. Why don’t you just post it???

it’s on the wire. not near as bad as you fools thought it would be. if you’re doing under $200,000-$300,000 and your LOS is 6 and over, you’re screwed…

  NEW YORK (Dow Jones)--Merrill Lynch & Co. (MER) is likely to push out many of
its lower-producing brokers with its 2009 broker compensation plan, according
to people familiar with the new grid.
  Executives at Merrill released the payout plan to branch managers Wednesday
afternoon and are set to announce it to the 16,000-plus brokers on a conference
call Thursday.
  A Merrill spokeswoman could not confirm the plan because it has not been
released to employees.
  The plan cuts the payout for brokers who have been in business six years or
longer to 20% of production if they generate less than $200,000 in production,
and 25% of production if they generate $200,000-$299,999.
  The "penalty box," as some brokers call this category, also includes brokers
who have been in the business for 10 or more years and produce
$300,000-$399,999. They will receive a 35% payout.
  "This is a huge cut for these people. Anyone who's in this penalty box is
going to leave," one Merrill broker said. "But I guess we're all bankers now."
  Some brokers blame the major changes in the pay plan on Bank of America
Corp.'s (BAC) acquisition of Merrill, which was approved by shareholders this
month.
  But the changes also come at a time when other firms are cutting pay for
similar categories of low-producing brokers. Brokerage analysts say that
overall, the industry is trending toward high producers.
  The 2009 Merrill compensation grid is also a big change in that it includes
one payout rate regardless of product type or ticket size. For example, it used
to offer different percentage payouts for insurance sales or managed accounts.
  The basic cash payout for brokers not included in the categories mentioned
above will be as follows:
  $0-199,000 will receive 36% of production.
  $200,000-299,000=37%
  $300,000-399,000=38%
  $400,000-599,000=40%
  $600,000-799,000=41%
  $800,000-999,000=42%
  $1-1.49 million=43%
  $1.5-1.99 million=46%
  $2-2.99 million=47%
  $3-4.99 million=48%
  $5 million and more=50%
  This new pay plan will be a step up for the high-end brokers bringing in $1.5
million or more in production.
  With additional bonus opportunities, it could mean a pay increase for other
brokers, too.
  There is also longevity award that provides brokers who have been with the
firm for five or six years and have at least $500,000 in production a bonus of
1% of production.
  For seven-, eight- and nine-year brokers there is a 1.25% bonus if they bring
in at least $750,000.
  For brokers with 10 to 14 years at Merrill doing at least $1 million in
production, the award is 1.5%. And for those with 15 years or more and $1.75
million in production, there is a 2% bonus.
  Other bonus opportunities on the new plan include an award for bringing in new
clients with at least $250,000 in household assets.
  It also offers brokers awards for doing more fee-based business as opposed to
commission-based business.
  Similar new-client and fee-based account bonus opportunities were offered on
this year.
  Households in the U.S. must reach $100,000 in assets for a broker to receive
to get paid for business done with the client.
  The new plan goes into effect at the start of 2009.

And the flood gates have been opened! Guess it’s time to set up shop.

I have some preemptive answers to anticipated questions:

Q: So, I’m under $500k in production at ML and I’m looking at a pay cut, can I market myself to another wirehouse?

A: Probably not at this time, however I’m fairly confident that some of the other wires will introduce new recruiting plans to accommodate the exodus from ML.

Q: I don’t want to wait a few months, let alone a few weeks to start looking around. What do you suggest?

A: I suggest you get a hold of a recruiter asap. You will need all the extra man power you can get to successfully market yourself to a prospective firm. You may want to focus on smaller regional and boutique type firms. Better yet, how about a big pay increase? Start looking at independent platforms (with the assistance of a recruiter) and you could actually see a healthy pay INCREASE if you are disciplined to run your own practice.

Q: I’ve only been in the business for (1-4) years and I’ve spent that entire time at ML. Should I stick it out here and try to build my business to meet a certain payout range?

A: Sure, as long as you can secure households with assets OVER $100k, since ML won’t pay on anything under that level. Then there’s always the question of what 2010’s payout plan is going to look like…

Q: I work at ML, am I a broker or a banker now?

A: You, my friend, are a broker stuck in a banker’s mold.

A broker stuck in a banker’s mold… great example…the writing’s on the wall my friends…well put SuperRecruiter

Zero pay on assets under $100k?

Does anyone remember only a few months back… all kinds of talk from managers, etc about how great BAC would be for ML and how comp would be “just fine” if not great, etc?  Retention was moderate at best, comp plan is good or bad for many depending on the FA but not the “win” folks have been waiting for.  Now, what’s freakin’ next???  ML’s being castrated slowly but surely! Mother just married a real sob.  

What happens when you marry a seriel killer? What sympathy do you get when you break down the door to marry a seriel killer?

Zero pay on assets under $100k?

What happens when you marry a seriel killer? What sympathy do you get when you break down the door to marry a seriel killer?