Merrill Lynch Payout on Annuity & Life Insurance: Please Help!

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Sep 18, 2010 11:45 am

Help: Annuity & Insurance Payout

Hi, I am about to start the PMDP program. I had worked for a Insurance based financial services company, and I am bringing a client who needs a minimum of 1 million immediate annuity. I need to know what the PC would be on this product with the following assumptions: A MetLife 1 million SPIA pays 4% gross dealer concession (that would be $40,000 GDC). Does anyone know the approximate PC for this case?  I also have the same question for life insurance.  Does Merrill pay the same payout (47% for new trainees) for annuities and life insurance?

Thank you for your help! 

Sep 19, 2010 12:17 pm

I can't tell you what the PC payout would be on an immediate annuity, sorry.

For the 2nd question, yes, ML will payout 47% (grid for trainees) of the PCs regardless of product type.  However, there is often a significant haircut in insurance products BEFORE they hit the grid.  For example, an L share annuity might pay 2.5% upfront with a 80bps trail at ML (recently changed, can't remember the specifics), while at an independant BD it might pay 4% upfront with a 1% trail.  On the B share, ML pays 4.5% with a 25bps trail.  Independantly, you will find in the 5.75-6% range with a 25bps trail.  On a 1mil B share ticket, that is the difference between a 54k payday (60k * 90% grid)and a 18k payday (45k * 40% grid).  And quite honestly, that is the primary reason I left. 

Sorry for the tangent.  Point is, the payout might not be what you are used to in your previous channel.  Hope that helps.

Sep 19, 2010 3:19 pm

Well in the pmdp program you will be eligible for the monthly bonus with that.  I want to say I looked at the payouts on our immediates and it's either 4% or 3.2% not entirely sure.  But here is how you can figure out what your monthly bonus would be if it is 4% : 40,000 PCs *.47= 18,800 - 1/3 of Quarterly Bonus - Monthly salary = Monthly bonus.  I just switched over to Merrill from Jones so I made sure to go over the the payout and bonus structure a few times, but yea its a bit confusing.