Asking 10,000 reps to make a decision about their futures is a tricky task, as American Express Financial Advisors (AEFA) found out.

The firm completed a broker "platform" restructuring process at the end of March. About one third of the firm's 10,200 brokers became full-time AEFA employees, according to Brian Heath, AEFA general sales manager in Minneapolis.

The remaining two-thirds chose Platform 2--an option to continue working as independent contractors under the AEFA franchise.

And in September, the independents will have a third option--joining the firm's Securities America division where they will lose the AEFA brand and get less support, but gain a higher payout and more independence.

The process wasn't without controversy. In February, a group of top producers met with AEFA executives to discuss the new franchise agreement. About 35 of the firm's 186 platinum team advisers flew out to the firm's headquarters in Minneapolis with a franchise lawyer in tow. They confronted company executives, including Heath and Doug Lennick, executive vice president of the advice and retail distribution group at AEFA.

According to one platinum team adviser who was there, the reps complained about payouts on their fee business falling from 100 percent to 91 percent , the fact that American Express continues to send online trading applications to their clients, and the new 500 dollars a month compliance fee--charged in addition to the 400 dollar monthly franchise fee.

"A lot of guys are very unhappy about this," says the adviser, who asked not to be identified. "A lot of people signed on, but continue to look at other options."

AEFA officials listened carefully, but did not change the franchise agreement, Heath says. "The advisers did a good job communicating their concerns," he says. "The company was responsive, but consistent."

Joel Davis, an AEFA rep based in Augusta, Maine, and also a platinum team member, says that despite the issues, AEFA "should be a better organization" after the reorganization.

Still, some advisers are looking forward to July 1, 2001--the date when they can leave the firm and take their clients with them under terms of their new noncompete agreements.

Adviser retention is a key area of concern for AEFA. In a presentation made to the financial community in February, AEFA President and CEO Dave Hubers said the firm's 7 percent annual adviser growth rate over the past five years compared favorably to Merrill Lynch's 3 percent rate and "very little growth" at Salomon Smith Barney.

"We still lose far more advisers than we'd like," Hubers admitted. "Through our three-platform structure, we should achieve better [adviser] retention."