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Wachovia’s Banking Unit Has New Deal for Reps

In an effort to transform bank branches into one-stop financial shops, Wachovia sweetens offers to reps willing to work in branches.

Wachovia Securities, which offers reps several different affiliation levels, has predictably come up with a recruiting deal that has several different plans reps can choose from. This particular deal is only for those reps applying to work in the bank branches, and not for the regular brokerage branches.

Like others firms who are trying to attract talented reps into their branches (Bank of America and Wells Fargo Securities), Wachovia is offering up-front money—something banks have been doing with greater frequency as they attack the securities market. However, the bonuses offered in a couple of instances—which pay out over five-years—are constructed as forgivable five-year loans, meaning a broker can be tied up for as much at 10 years.

The deal, according to several sources, is generally for representatives with about $300,000 in annual production. The most lucrative deal from an upfront perspective offers a 50 percent bonus of trailing 12-month production at the front, which is forgivable over the following five years.

The second type of deal has a smaller upfront bonus: 25 percent upfront, with a 10 percent bonus based on the trailing 12 production of the rep for the next five years. Each of those 10 percent bonuses is constructed as a five-year forgivable loan, according to recruiting sources. Meanwhile, the final type of this recruiting offer has no upfront money—but instead offers 20 percent bonuses for five years.

Reps between $250,000 and $300,000 in annual production are also eligible for bonuses, but at a reduced rate.

Recruiters say the deals, as well as those offered by other banks, are evidence that the bank brokerages are getting more aggressive with their recruiting efforts. However, with the exception of Salomon Smith Barney, which is owned by Citigroup, Wachovia Securities is the only one with a sales force of any size that rivals the New York-based wirehouses. The firm currently has about 8,000 brokers, although that includes Series 6 licensed reps.

"The truth is the banks, in the past, had always felt value-added for the bank broker was the ability to tap into bank clients," says one industry recruiter. "But with Wells Fargo and Bank of America doing this for a while, Wachovia felt it had to step up to the plate."

Wachovia officials were not available for comment.

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