Firms proved exceedingly supportive of reps affected by this year's devastating hurricane season.
Many of the nation's largest broker/dealers helped Florida-based reps with compensation for September, as officials at several firms said the onslaught of hurricanes necessitated a response.
“We've never done this before,” says Bob Mulholland, head of the Americas division of global private client at Merrill.
It's as if the firms were writing a memo to their advisors: It's one thing if a weather event costs you a day of work here and there; it's another thing entirely when a state gets slammed with four hurricanes in a month, tearing the roof off some offices and frying the servers at others.
“In the Midwest, a tornado will hit one office or two, but this hit a couple hundred,” says Jim Weddle, partner in branch administration at Edward Jones. “There's such a psychological impact, not just from the brokers, but the residents as well.”
At Merrill, where 27 offices were affected, the firm spent $500,000 to credit reps in September for what they averaged in transactional production from the previous three months. Reps were shifted to branches still operating where they could access account information stored on the firm's mainframe, which was not affected by the weather.
The worst of the damages were in Delray Beach, Fla., where water flooded in from above the computer room, knocking out the office's servers.
At Smith Barney, approximately 300 employees were affected by the storms, according to a Smith Barney official, who added that about $1 million in compensation was advanced to affected reps.
Edward Jones compensated 211 reps for lost production. Of the 65 offices that were closed, only about 10 remain so, Weddle says.
Wachovia Securities paid about $500,000 to reps in Florida, Alabama and Louisiana. Equipment was moved to set up temporary branches, and some employees were given temporary housing as well. Wachovia provided all sorts of supplies to employees — Hurricane Charley necessitated a donation of 336,000 pounds of ice, 190,608 gallons of water, 6,000 ‘D’ batteries, 42 chainsaws and 250 tarps, according to Wachovia spokesman Tony Mattera.
While the hurricanes raged, Merrill client account queries were rerouted to Grand Rapids, Mich., according to David McWilliams, regional managing director for Florida at Merrill. But many of those who called the Florida-based offices had other things to discuss.
“What was interesting was with the clients, most of the messages we got were to see how we were doing,” McWilliams says.