Bank of America Merrill Lynch has been bleeding top brokers in the past six months, just as many industry observers predicted. Merrill lost approximately 85 brokers this year through Feb. 15, according to data collected from public records by Registered Rep.’s database partner Meridian IQ. Many of these brokers manage millions in assets. A number of teams with over $1 billion in client money have also left for rival wirehouses like UBS and Morgan Stanley or for independent firms like HighTower and Focus Financial. Is this just a blip or a longer-term trend?

Merrill says the numbers are inflated and the losses are no big deal, but the fact that it rolled out a large recruiting bonus last month is telling. In February, Merrill started offering a 9-year deal to advisors that can reach 330 percent of production if all the required asset and growth hurdles are met. At this point, Merrill’s deal is more generous than that of any other firm, according to recruiter Courtney Raymond. Merrill declined to comment further for this story, but it also filed documents with the SEC in February expressing concern about its retention of advisors with wealthy clients.

If it gets really bad, the firm may decide to pay retention bonuses, says Todd Taylor, partner at Heidrick and Struggles, a global executive search and consulting firm. “They don't like to do that, because it’s capitulation, and they also don't have the margins for it.”

Of course, turnover is a constant in the wirehouse world. So a big part of the problem is Merrill’s inability to recruit big brokers back into its ranks, say many. The firm has hired at least 55 producers this year through Feb. 15, according to Meridian data, but these are primarily smaller producers and rookies new to the business.

In fact, the recruiting well has been so dry over the past six months that Raymond, who has recruited exclusively for Merrill for the past 18 years, has had to diversify her business and start working with other firms, she says. Only in the past six weeks has recruiting picked up again, she says. Just last Friday she helped to place one team. Last week, Merrill also picked up two additional teams with total assets of around $400 million.

It was outrage over Bank of America’s $5 debit card fee that kicked off the recruiting trouble, Raymond says. “The press was so bad on that, it took out everything we had closing, including deals we had set for the next day. They didn’t know how they were going to tell clients. It also killed our entire pipeline. It killed everything from ‘Sure, let’s set up a meeting,’ to guys who were six months in and ready to schedule a meeting with the transfer team.”

Raymond says the recent reversal is not just the result of Merrill jacking up the cash and bonuses it is offering new recruits a few weeks ago, though that is a huge plus. It’s due to an improvement in Bank of America press (the bank easily passed the Federal Reserve's stress tests this week, giving a boost to its stock), some high profile advisors looking to leave other firms, and the fact that management changes at Merrill are now settling down, she says.

Dramatic recruiting reversals are nothing new. Not so long ago, UBS was the unpopular kid on the block due to its scuffles with the IRS, and other problems that constantly thrust it into the headlines. It was rapidly losing clients and talent. Then came Bob McCann. Today, UBS advisors say morale is strong, clients are coming back, and recruiting is better than ever. In fact, UBS is the one recruiting the most talent away from Merrill. According to Meridian IQ data, UBS picked up almost 40 Merrill advisors this year through Feb. 15. Before UBS, it was Morgan Stanley in the hot seat. And before that Merrill itself went through a rough spot in the early aughts.

“In 2005, when Gorman took over Morgan Stanley Smith Barney, he faced a similar environment,” says Todd Taylor, partner at Heidrick and Struggles, a global executive search and consulting firm. “He was coming from Merrill. He would frequently say, ‘Every firm has its time in the can. Merrill went through it in 2000-2001. We'll get through it.’ It’s just the cyclical nature of the business. Morgan did get through it, began bringing in many more people than it was losing, and gained some momentum, at least until the crisis hit. UBS also had its issues. It definitely is temporary, unless you believe that BofA is going over a cliff, which wouldn't necessarily spell doom for Merrill.”

Departing brokers complain about a variety of things—many of them having to do with the new Bank of America culture. But there’s also the simple fact that the golden handcuffs that had kept so many Merrill brokers in their seats for a few years were coming off—with the stock trading at $5 a share (though it’s surging toward $10 this week), and certain 10-year stock awards vesting in February, along with portions of retention packages awarded when Bank of America took over. Knowing this was coming, recruiters piled on. Constant headlines about Bank of America’s mortgage troubles, pricing decisions and debt troubles certainly haven’t helped.

“I see it (the recent defections) as a combination of several factors that create a ‘perfect storm’ type of environment,” says Taylor. “When firms go through these ‘perfect storm’ environments, all competitors smell blood in the water and begin to target the advisors, offering large incentive packages. When this happens it can create some breakage, attrition numbers can spike, and then it can build on itself. So, I’m not surprised it’s happening, but some of the concerns should be short lived and it doesn’t necessarily represent anything long-term that will damage the franchise.”

Of course many of the advisors who have left have very legitimate complaints. John Beirne, a partner at Beirne Wealth Management Group in Milford, Conn., which left Merrill to join Focus Financial in mid-February, says his team took off because it couldn’t solicit any new public pension plan accounts, the team’s primary source of business. But the team had also been considering a move for some time. “I think the longer-term concern had been the influence that was coming from Bank of America. Most of the people including myself with any tenure were raised in an investment culture, a culture run by an investment firm, and now its run by a bank culture and it’s different. Clearly it was significantly different. For us, we felt we wanted to have the same kind of culture we had had collectively in our group for over 8 years.” Further, he said, the new payout program gives advisors incentives to put clients in annuities, credit cards and checking accounts. “For us, it felt like more control was being placed upon us with regard to the structure of our retail clients.”

On the other hand, those advisors who remain at Merrill say they are happy and unfazed by the departures. One of the very top advisors at the firm says the departures just aren’t that significant.

“You have 16,000 advisors and 50 leave? The people who left, they left for money because they needed some. They’re broke. I’m not sure that means anything other than that they needed the money. It’s not like Merrill suddenly became a shi*ty firm, it’s still a great firm. I can be critical of the firm, but all those things people say they’re pushing, it’s just an excuse to leave. We were selling mortgages when we were at Merrill and we’re selling them now.”