Contract Problem 1st Day on the Job

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Dec 6, 2009 3:56 pm

Moved to a new firm after being at the same wirehouse for two decades.  Signed the contract a week before, the BOM at the new firm signed it too.  BOM said if I signed, I’d receive my first “loan” check on the first day. 

The day before I start, I’m presented with more loan agreements and a promissary note (thought this was covered in the contract).  They look fine and I signed.

Upon resigning and arrival at the new firm, after I already started calling clients, BOM tells me that his SVP is holding up the contract over a single previously agreed to clause and is not sure when I’ll get my check.  BOM says even though he’s signed the contract, it’s not valid until the SVP signs.

I’ve resigned from my old firm.  I’ve called my clients.  In two days over 30% of my book has already signed transfer docs and new account forms.  Do I put on the brakes and refuse to sign the client transfer docs? 

Only experienced insight need reply.

Dec 6, 2009 4:23 pm

Why would you move without verifying it was done…

  I don't think you can back it up now, unless you want to explain to your clients that the reason you were moving was for the money, and now that they won't give you the money you are thinking about going back.   Plus what are you going to do go back to your old firm? Why would they take you back?   Quit wasting your time with the BOM and go see the SVP that is where your problem is.
Dec 6, 2009 4:44 pm

I did verify.  Contract signed and done. 

My old wirehouse manager asked me to call him this weekend if I changed my mind.  I won’t.

It’s less about the money as the contract point the SVP is arguing (as I understand he is prone to do) is not major dollars, however, I do think it is unprofessional and somewhat of a bait & switch.

Dec 6, 2009 4:55 pm

If you can go back then you should… but first… why did you tell your clients you were leaving?

Dec 6, 2009 5:08 pm

Now that you have had 30% of your clients sign ACATs, there is no way you can go back. There is no intelligent way to approach those clients at this point.

The only intelligent thing to do, in my opinion, is to move forward and get an attorney, quickly, and pay him to deal with this so you can focus on getting your clients over, before your old firm rips you to shreds. These guys clearly decieved you, and there has to be a leg for you to stand on. They also aren;t going  to want this kind of stuff to get out, becasue it won';t help them recruit going forward.
Dec 6, 2009 6:45 pm

what is the clause?    i’ve never heard of anyone getting check first day

Dec 6, 2009 7:00 pm

You should move forward with the transition.

I know this is a nerve-wracking turn of events, but everything usually works itself out here.... If I were you, I would continue in good's the best move considering the already resigned, you already contacted many of your clients, you already have signed transfer papers......   That being said: It would be helpful for us to know what the clause in dispute is..... And It usually takes 2-3 weeks for that big check to get, I'm surprised they said you would get it day one....   Good Luck........
Dec 6, 2009 7:28 pm

Thanks for all the responses thus far.  It’s constructive. 

First, wasn’t thinking of going back, but I have to sign the ACATs in order for them to be processed and I have them in my possession. 

The clause of dispute surrounds including liabilities to the asset numbers for transition comp in the future.  I used to do a decent amount of liability business; it’s actually how I built my book.  The SVP wants it striked because like many merged firms where the bank and the brokerage are separate the SVP is not comped on liabilities and somehow fails to see the bigger picture.  The BOM is great and has had some run-ins before with him.  We are both going in to the fellow the SVP reports to who I’ve met with twice prior to being hired tomorrow and escalating.

Thing is, it’s not a huge number, so I could give it up, but I also want every chance to hit these targets.  But on I’d like to see how this tests the character of the firm in how it’s resolved. 

Interesting that no one gets a check on Day One.  Day One was great and refreshing, though. 

I “asked” my BOM if perhaps we should consider me not coming in on
Monday and waiting for the contract to be signed.  I could still call
clients and sit on the existing forms for a day.  He said he didn’t think that would be necessary.

Dec 6, 2009 8:29 pm

Merrill gives you the check the day you show up.

Dec 6, 2009 10:15 pm

You trusted a wirehouse

Dec 7, 2009 10:09 am

Managers often refer to the upfront portion of the deal as “day one money”, I hear that all the time, even though as someone here pointed out…it’s usually, day 19 or day 23 money etc.  

Dec 7, 2009 12:13 pm

I believe RJ gives day one money also.

Dec 7, 2009 1:01 pm

I have had two deals in my. life. First one,  day one check was sitting on my desk (nice touch). Second time, the firm wouldn’t ok the check until the day I moved. Then it was up to the slow people in the accounting dept to send the check to the branch. Took about a week - but the BOM told me this upfront.

It probably won’t be a problem for you. Nobody would go to that office/firm if word got out that they screwed somebody over on their upfront check.

Dec 7, 2009 2:56 pm

It took me a week to get my check. I would stick with your decision, and hope the svp isnt a total douche

Dec 7, 2009 3:09 pm

Have a lawyer review everything

Dec 7, 2009 8:07 pm

They are trying to trick you. It’s a pure attempt at a bait & switch. It is terribly unprofessional and if you keep quiet, you will always be their bitch.

One option (and you need to decide if this is right for your situation - and if you have the personality to do this right) is to complain incessantly about it. Every chance you get, get on the phone and talk (comically loud) about how you are still waiting for your check. Make sure everyone in the office hears you, everyone who comes in for an interview hears you and everyone who has a meeting with a client hears you.

They know your contract makes it difficult for you to go back…I would hope it also makes it difficult for them to fire you. Get loud and they will pay up just to shut you up…they will appreciate your balls.

A lawyer is probably a good idea also. Sounds like you will need one with this shop.

Dec 8, 2009 11:08 am

Morgan always paid on Day 1.  Let me preface my comment by stating I am a BOM.  I would not let the contract be changed in any way unless materials you presented turned out to be inaccurate.  These firms have a serious due diligence process.  They knew about your liabilities when they drew up the contract for you to sign.  If the SVP didn’t review it before it got in the BOM’s hands to present to you, that’s the SVP’s problem, not yours.  You may not be able to tarnish the firm’s reputation as a whole, but you certainly should not keep your mouth shut locally.  As a BOM, I know how important it is for a recruit to have a good transition.  If they have a bad one, then I know all the other FA’s in the neighborhood are going to know about it.  I wouldn’t be screaming in the office, because then you would become unprofessional.  Besides, your new colleagues aren’t going to feel sorry for you that you haven’t been given your check.  Their probably bitter you get one anyway.  You should professionally let your BOM and SVP know that your feedback to your friends at your past office will not be positive.