For years, Merrill Lynch, UBS PaineWebber, Salomon Smith Barney and Prudential Securities have waged a fierce war in the battle to snag multi-million producers. Now they have some additional competition in—surprise—Deutsche Bank Alex. Brown.
DBAB has crashed the party traditionally dominated by the major wire houses, having decided to offer signing bonuses to high net worth producing brokers, according to reps at the firm and recruiters who work with DBAB.
“This is a sign of the times,” says a DB Alex. Brown rep in Florida. “To compete for assets with the big boys, you have to spend some money. This firm has traditionally stayed away from that, but executives at this firm realize that if they want to grow and compete with the Merrills and Smith Barneys of the world, they have to bring in some heavy-hitting artillery—and to do that you have to pay a signing bonus.”
Recruiters working with DBAB say the firm has not said what percentage of a reps trailing year’s salary it plans to pay as an upfront bonus. “But it will be competitive with such major wire houses as Merrill Lynch and PaineWebber,” a recruiter says, adding that DBAB will pay reps “somewhere between 50% to 80%” of their trailing year’s salary as an upfront bonus.
In the past, DBAB refrained from the signing bonuses arms race, preferring to remain on the sidelines while the big houses battled it out, throwing staggering amounts of money around. DBAB has had a history of offering back-end bonuses to brokers, preferring award money after a rep proves his or her worth following the first or second year, according to brokers at the firm.
DBAB management declined to comment on the move.