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Advice for an intern thinking about doing the ML PMD program?

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Feb 5, 2014 2:27 am

Hi ya'll, 

I am a jr finance major working for ML as a GWIM intern. I worked hard, brought in clients, and was given the green light for full time employement in 2015. I am estatic and couldn't be happier as jr. 

One question on my mind: Should I go into ML's PMD program out of undergrad?

If you're interested about my situation: 

Almost everyone has advised against it -- turnover, cold calling, etc. My boss even sat me down and advised me to think about exit opps for the immediate future, advising me to come back years later.

The intense work coming out of school is not an issue as I fully embrace the 40+ hours as a finance major.

Issues I see through my narrow scope of vision as an intern: 

1) Networking -- most FA's around the office grew up with taste and subsequently already know much of the wealthy around TX. 

The work scenario: I work with three others -- X, Y, and Z. X was hired by Y's dad. Y was given dad's clients. Z grew up with the wealthy and has an extensive network in Dallas. 

My scenario: I grew up in the suburbs of Los Angeles, CA and got involved in gangs, etc when I was little. After moving to Dallas for high school, pure motivation/networking got me into a well respected non-target university in Dallas. I have no connections or even an idea of the wealthy culture (I'm just now immersing myself). 

2) Fit -- I thouroughly enjoy the culture of the demograph I work with. I really, really do. However, I can't help feel out of place when I'm out at lunch with 40yr+ millionares while wearing a cheap suit and sporting an Asian-American smile. I am 20 years old and the only minority working in the entire office (not to mention the entire Dallas area). I get constant stares/blatant head to toe checks of confusion both in and out of the office. 

3) Trust issues due to age -- you can know everything but living through it is different. I'll be 21 when I start calling door to door. Who would trust a kid with their money?  

Really, this is a question for those who have been in my shoes. Can someone young with my background succeed in the PMD program right out of school? The grim numbers and tangible evidence around my own office are really pushing me to run away. I do not fear work but I do fear unrealistic goals (hard work seems like only a fraction of the equation in the PMD program). I feel as though my chances of making it after yr 3 are especially slim simply due to the nature of the program/industry and my own background. I thoroughly enjoy my work (except cold calling but who does) and really feel ML upholds one of my most sacred virtues in the work force -- freedom. 

Any advice/insight from the veterans? "To be, or not to be, that is the question-"

Note: A major draw for me is the promise to be put on my current team immediately but w/o leads. 

Feb 6, 2014 8:52 pm

Merrill PMD is the most difficult of all wirehouse programs to graduate. There are only a few types of people that graduate the program:

Come over from existing wirehouse w/ about $5mil AUM Have an extremely large and wealthy network of people that will move money to you quickly Have considerable family money Join a team, and pretty much play a support/admin role until they are ready to start handing off the bottom of their book to you.

If you don’t fit under 1 or more of these categories, don’t bother with Merrill. The hurdles will force you into doing transactional business (annuities, A shares) until you eventually fail out, and are left with nothing but dead assets.

Honestly the best advice I ever got before getting into the industry was either you need to be able to bring $10mil AUM over in the first year, or be willing to work as a gopher for 5 years. Otherwise it’s pretty miserable.

Feb 7, 2014 6:10 pm

I’m not sure what’s going on over at Merrill, maybe its the BofA stuff…but I feel like many have been jumping ship, at least where I am…MS, UBS, JPM, they’re all full of ex Merrill guys that have left over the last 4-5 years or so.

Feb 7, 2014 8:54 pm

First off, ML/BoA is a great company to work for. I have been on board for a little while. The PMD class is a very structured class with high levels of skill and work. The first thing you should ask yourself is, do I like the team in my current office? If not, go interview other offices. The team atmosphere in the office is most important. Second, if you decide to PMD, the time you must put in is very hard for many people to do. But, if you want to end result, you must be dedicated. Third, get well acquainted with the teams and specialists in the office. They will be able to streamline planning and communication for clients when the time comes. Do not try to go it alone or accomplish planning via the teleconference stuff – it just wont happen and you will waste your time. Finally, make sure you are always looking out for yourself. This industry is moving towards a team game, but the most important person is you. You have to uphold your standards, ethics, and handle your practice your way.

As for what gekko said, that is the old antiquated Merrill garbage. I have met many people that came from normal, average Joe walks of life and are servicing 50+ million in 4-5 years. The ability to make people trust you and your team is paramount. Coming from a background of rich, family money, being a team’s b**ch is so far from the truth its not funny. Production trumps everything in this industry. So find multiple ways to get new people to talk to daily and make it happen.

As for the age thing, ML is 100 year old and owned by one of the top banks in the land. They make hiring mistakes all the time, but when it comes to ML FAs they are very stringent on who the hire and when. People will be far more impressed that a 21 year old communicate and follow investing strategies when you show them what ML has to offer. I do recommend that you stay away from door to door. There will be easier options for you to find. The tried and true methods of COIs, networking, seek and find relationships will all come full circle. It is hard work, but it can be fun work.

For teams, be careful that you enter onto a team that you can work within. It is pretty much the professional version of a marriage. It is very easy to get involved in and very difficult to get out of – and getting out of involves a lot of money. Being on the wrong team can set you back a lot of time and money. Sometimes being a part of several partnerships will net more money and clients than being on a team.

Also in all of this, be careful for the Johnny jump ups – those that have the next greatest thing. They usually dont last. So dont waste your time. Also the Debbie downers will cost you time. Stay away.

The fact of the matter is, if you want it – go get it. The right person with the right strategy can make incredible things happen.

Feb 7, 2014 9:16 pm

Halbert had some good points here, particularly about the teaming issue. Once you show the office that you have some good contacts and networking ability, the sharks in the office will approach you with the “happy to help” speech, essentially looking to help separate you from your hard-earned PC’s. Be very careful who you associate yourself with in the office. He’s dead on about how it’s easy to team and hard to break it up.

As for ML in general, give it time bro. Been there “a little while” you will see at about LOS 24 months the PC hurdles get insane. Only people who have come over from other firms, or are on big teams getting fed PC’s tend to make it all the way though. In our group, only 1 guy made it the entire program on his own (just starting in the biz). We saw close to 100 bomb out along the way.

All in all, good advice from Halbert. Don’t ever compromise yourself or your morals just to hit a few hurdles. Your reputation is your most important asset.

Feb 8, 2014 7:18 am

It’s a sales job plain and simple. A retail sales job at that. That’s what financial advisors are - a retail distribution channel for institutional money managers. If you are going to do anything finance, go towards the institutional side - investment banking, portfolio management, private equity, etc. Retail financial sales is for chumps. Yes, do the top guys make 500k+ and some 1 mil plus. Absolutely. But so do lawyers, doctors, loan officers, realtors, etc.The best thing about financial advising is that it does get easier the further along you go. That engineer you talked to you 5 years ago now has a 500k 401k rollover for you; your client who makes 80k a year now comes into a 3 million dollar inheritance, etc. The more you can stay in it, the more these opportunities come. The other thing is the pay model. It takes FOREVER to make decent money. That’s why the fallout is so huge - and the fact that no one on planet earth enjoys prospecting to strangers. So paywise, you’ll get a base that lasts for 18 months - at which time that base will be reduced every quarter down to 3k a month or 36k year. But the real numbers are the net dollar amount you pocket for assets under management or AUM. The average book generates only 70 basis of revenue when it’s all said and done. Of that 70 basis pts, you get paid anywhere from 25-35% of that. That’s the problem. In short, it will take you 5 years to make 6 figures - that’s if you make it. Another reason why guys bail. And at Merrill, you don’t get to keep all of it because some of it they put aside for you as deferred compensation - which is BS to keep you hanging in there longer. So let’s say you are able to gather 50 million in assets in 5 years. At the end of year five, you’ll be making 122k roughly. I don’t know, that’s a lot of pain to make just 122k. You can do that funding 12 million in mortgage loans in just one year. At the end of the day, we’re drawn to financial advisor jobs because of the love of markets, etc. But at the end of day, you’re an asset gatherer, a salesman of the 1% money management fee, and an evangelist for the diversified portfolio.

Feb 8, 2014 3:01 pm

Like a previous poster mentioned, I have seen a lot of people from my local ML office move on to UBS and especially MSSB, both established individuals/teams and people in the first 3 years of the PMD program. I heard that ML(at least the local office to me) is only hiring people on teams now and are encouraging the existing independents to link up and join teams.

Feb 11, 2014 1:50 pm

@sable – I disagree 110%. If this was a sales job then we would all be making 75k a year with no topside benefit. This is a relationship job more than anything. Just because you have good contacts does not mean you will prosper. Sales techniques in this industry tend to lead to more disappointment. Being able to turn information from a close relationship into a client is closer to what we do. You can throw all the sales mantra you want at CPAs, Attorneys, Docs, etc., but none of them will bite. Because they have heard it 100 times before. Find a key aspect they want to focus on through your relationship and you have a client for decades.

I do have one question for the group – who here has actually started the PMD class and finished??

Feb 12, 2014 2:54 pm

Only 1 person has made it through the program in our complex in over 3.5 years. I.e someone who has joined the business starting at 0, and built their book themselves. The people who spent 5 yrs at Wells Fargo and bring over a $4mil book to PMD, or the guys joining dad’s team don’t count.

During that 3.5 yrs I would say close to 100 failed out.

Feb 13, 2014 8:55 pm

Know one guy who graduated but had to quit because his income went down over 30% when the salary was taken away. He was able to make the hurdles doing variable annuities and getting PCs, but his AUM wasn’t enough, which is the most important when you graduate.

Feb 14, 2014 4:53 pm

Correct Belem.
Actually the % of PMDs that make it 5 years is disgustingly low. Once you get thru the program, you go straight salary. Except you no longer get paid on accounts under $250k like you were during the program. So for many young advisors they are no longer getting paid on 1/2 of their book. That is unsustainable.

Feb 14, 2014 8:25 pm

This was copied and pasted from another site. It’s not my experience but an interesting read.

Attention all NEW financial advisors and trainees. Under no circumstances should you accept a position with Merrill Lynch. The base salary looks appealing but the fine print and ever changing compensation plan will lead you to certain failure. Merrill Lynch of Greensboro misled me into accepting a sales/Financial advisor position without describing the quarterly and yearly total asset goals needed to stay in the PMD program. They confuse new advisors with fancy acronyms such as PC credits, NNA and NNH.

I asked on several occasions what these acronyms meant and I was not provided a clear answer. I was given the impression that all was needed was approximately 8 million in new assets to be gathered in 3 years to graduate training program. The truth is that you need 27-30 million in total new investable assets to achieve your production revenue hurdles and other two criteria. This was disclosed a few months after I was registered. The sales goals are totally unreachable and unrealistic in today’s investment climate in the piedmont triad of North Carolina and would not be easy to do in Los Angeles or NY. The hiring manager will not tell you this. If you can fog a mirror you will get the job and any training you think you will get will not happen.

There is no sales training, just online tutorials. You are only to prospect $250,000 and larger households. Merrill Lynch loves structured products which almost always lead to client losses. The sales coach and resident directors are a joke and only interested in their personal client book. Trainees are left to their own devices and are considered the competition. The compliance department and resident director is like Nazi Germany. If you make a mistake or unknowingly break a policy there is no 2nd chance or verbal warning. You will be FIRED!! and permanently tarnished. All of the future broker firms you apply to will see Merrills retribution on your U5 and unlikely to hire you. FINRA will not help you.

Absolutely 0 leads from Bank of America. Absolutely 0 leads period. Good luck on prospecting the mass affluent and high networth. The only chance a trainee has is to be from a super wealthy family and network of daddies rich friends. Merrill Lynch is not the same Merrill Lynch from the 70’s and 80’s. Merrill Lynch is a bank owned product pushing organization that loves to pretend they are superior to all. The truth is they are NOT!. In the 1 in 10000 chance you do graduate from the PMD program ,your commission will be 30-35% leading to almost an immediate paycut from your 3 year salary.

The Greensboro office Resident director and compliance director wrongfully terminated me over Merrill Lynch policies that I could not have possibly been aware of. I have the Series 66 study materials to back up my actions. Regardless that my conduct was in total compliance with FINRA and the SEC. My U5 has been permanently tarnished by Merrill Lynch in regards to the reasons of termination. The only way to expunge or remove comments is to sue Merrill Lynch and pursue arbitration. This process is costly and often ineffective. God help you if you try to leave or are terminated from Merrill Lynch during the training period. They will make sure you can’t take your clients with you for at least 2 years and attempt to prevent you from obtaining future employment with a competitor firm.

In closing, if you like the following realities listed below, please by all means subject yourself to a certain doomed career as a financial advisor with Merrill Lynch.

A. Arrogant and superficial peers to work with
B. Military style compliance with 0 tolerance to any compliance mistakes
C No hands on sales training.
D Misleading or difficult to understand comp plan
E.COLD Calling every day
F. No leads
G. Unrealistic sales goals and expectations.
H. No teamwork or mentoring without giving up half of your new account.
I. Inferior and non transparent structured products to sell.
J.Possible permanent damage to your reputation if you leave or are terminated.
K. Bank of America being in the news every day.

Well that tells it all. All of the above applies to new brokers and advisors who are considering a career with Merrill Lynch. If you are a seasoned advisor with a large transferable book of business your experience will probably be much different. Be Careful what you sign. Merrill Lynch does have quality research, superior technology and innovative wealth management tools. They are probably a good fit for some Million dollar producers.

Feb 17, 2014 5:30 pm

Back to the original post, if you are 5-10 years beyond the time you start in this career, I have never heard of anyone who did not think ML’s training was the best. So, if you want to start somewhere ML is the place. However as I have mentioned, if you are not prepared to live, eat, sleep, breathe, walk, talk this stuff… and more…then there is no sense in even discussing where to go. This is a tough business. There is a reason 5% succeed. And of those 5%, less than 1% make a great career at it. At every point along the way, you will have tons of people who say you can’t do it. It is that little voice in your head that lights a fire and keeps you moving forward that will help you in the long run.

Whatever you do, keep us informed. I think you have a lot of people on here who would be interested to hear of your outcome.

Feb 17, 2014 8:28 pm

I agree with bhalbert. If you ultimately want to build a practice that is highly lucrative but also will give you an ideal lifestyle, then I’d recommend you need to focus on fee based for at least 85% of your income. This will also give you tons of leverage should you ever decide to switch firms. But getting there takes a lot of years and some luck too.

Sure the failure rate is very high, but so is any other industry where you can earn $1mil a year for 20+ years.

Feb 17, 2014 10:07 pm

[quote=bhalbert]Back to the original post, if you are 5-10 years beyond the time you start in this career, I have never heard of anyone who did not think ML’s training was the best. So, if you want to start somewhere ML is the place. However as I have mentioned, if you are not prepared to live, eat, sleep, breathe, walk, talk this stuff… and more…then there is no sense in even discussing where to go. This is a tough business. There is a reason 5% succeed. And of those 5%, less than 1% make a great career at it. At every point along the way, you will have tons of people who say you can’t do it. It is that little voice in your head that lights a fire and keeps you moving forward that will help you in the long run.

Whatever you do, keep us informed. I think you have a lot of people on here who would be interested to hear of your outcome.[/quote]

Wow, didn’t think I’d get any response. Good stuff ladies and gents! Solid advice I will keep in mind. Will keep ya’ll posted as to what plays out in this journey. Really appreciate all who have contributed to the discussion. If anyone else has anything to add please feel free to do so.

Feb 19, 2014 2:18 pm

I have never heard of anyone who did not think ML’s training was the best. So, if you want to start somewhere ML is the place. .

MSSB has better training with their PS1, 2, and 3 off site training. When I went to those training trips to NJ, the caliber of advisor was more impressive than what I saw at ML when going to a discovery meeting training class for them. Plus, ML uses Fire Solutions for Series 7 and 66 prep, not the best vendor to use. MSSB uses STC unless that has recently changed. And the production hurdles are easier to hit and are quarterly goals as opposed to the monthly goals at ML.

The biggest hindrance to ML is the document they make you sign before you are hired that if you quit within the first 3 years of your employment at ML and go to work for a competitor within a year after leaving, they will make you pay back the training costs with the amount determined by how far into the PMD program you were when you left. I know a few guys who got a bill of over $15,000 from a law firm in Philadelphia who represents ML in this matter. That alone is a reason to not take a job with them.

Feb 20, 2014 1:24 am

… I have never heard of anyone who did not think ML’s training was the best. So, if you want to start somewhere ML is the place.

This is definitely not true. I know several people (some who left in the middle of the PMD program and others who finished), who would disagree with you. No offense, but you almost sound like you work in their PR department

Feb 20, 2014 3:05 am

This is definitely not true. I know several people (some who left in the middle of the PMD program and others who finished), who would disagree with you. No offense, but you almost sound like you work in their PR department[/quote]

Did you not see my badge and expo table set up as you walk in? Actually, just an honest advisor who talks to those in the industry, senior level guys to rookies, wealth managers to annuity pushers, IT pros to CEOs. When the topic comes up about training it is pretty one-sided from the viewpoint of those that ‘think’ they know. That does not mean it actually happens. This is a business built upon your going out and finding success versus the sit in a class room and learn how to sell. I have not seen one EJones rep push wealth management like the big wirehouses…and for several reasons, but mainly because they are trained to segment their book. So, yeah I will be a PR team if I need to explain what the view point is. I learned a long time ago that it is better to see the world through your customers eyes than to act like you know what they are thinking about you. We can debate this issue all night long (and I have many times) but the fact of the matter is the PR campaign for decades has worked in the favor of ML. PR does not mean results, however!

Feb 20, 2014 9:07 pm

Hello All,
We are looking for an active US Credit Investment Grade Bond manager (benchmark: Barclays Capital US Credit Index, min. rating BBB, derivative allowed, currency hedging) for potential investment of EUR150m.

I hope you could help.
Many thanks

Feb 22, 2014 3:43 pm

Wait…but I was told that I WAS in the best training in the industry…BOTH times.

They all say that, and theyre all very similar. Maybe thats why they say it, all reading from the same “sales for dummies” book haha. All the training programs are great, you learn a ton and are asked a ton of you…but unless you’re in a unique focused program, FAA PMD Ed Jones, etc. Theyre all the same training…well, maybe not Jones cause they dont teach much in product or strategy, just gathering