Let the penny pinching commence! Merrill Lynch's training program took a hit yesterday as many of its trainees were shown the door.
A Merrill Lynch spokesperson confirmed the layoffs, but could not provide details about the number of trainees let go. In general, trainees who had been generating revenue for fewer than 24 months and did not meet certain production thresholds were told to take a hike.
"It has a lot more to do with the weak economy than anything else," a source familiar with the situation told us. A weak economy and ugly market make a tough job almost impossible for trainees, who struggle to gather clients and assets in order to meet certain production levels. "The program is still alive—it's just been cut back," the source adds. Merrill made its first round of trainee cuts just last month when it cut people from its Paths of Achievement training program. The firm also has a newer training program called Practice Management Development. A Merrill spokesperson declined to offer any additional details about these programs.
Merrill trainees on the Registered Rep. advisor forum were discussing the possibility of trainee layoffs early last week. One reader wrote on Monday, "I got cut this morning. Now the job search begins." Another wrote Tuesday, "Am I the only one who feels kind of relieved? No more having to defend ML! ... Working for a company that is constantly in the news and getting bad press sucks! It is distracting for employees who don't know what their future holds, and it is hard to bring in assets when your institution is on the verge of collapse. I am glad I will never see a 'Why your assets are safe at ML' brochure again! Thanks to ML for the training and the opportunity in the business, but I am glad I can start with a clean slate."
Brokerage training programs have historically waxed and waned along with the state of the economy and/or a company's growth plans. But they have never had a terribly high success rate. In fact, training program have suffered in recent years, through good times and bad, as brokerage firms found they were more interested in paying big bucks for experienced brokers with hefty books of business. It wasn't and still may not be) uncommon for one wirehouse to pay as much as 240 percent of trailing 12-months' production for a top broker at another firm. Merrill—and others like it—is no stranger to the practice.
"Training programs haven't really been a priority for any of the firms for awhile now," says one veteran Merrill broker.