Merrill Lynch is asking mutual fund and private money managers to pony up $20,000 for a "speaking slot" of five minutes in front of its sales reps during a series of upcoming branch office meetings, sources familiar with the situation say.
The payments get managers in front of brokers at meetings to be held at various branch offices around the country. The road show kicked off in early March.
Managers and vendors are reportedly only allowed to speak at intermittent time slots during the all-day meetings, although they're allowed to buy as much time as they desire, the sources say.
Merrill is reportedly promising that at least five top producers will be present. Most managers only are buying one or two time slots, but at least one manager is buying 10 slots.
A Merrill spokesperson, however, was unable to confirm that the meetings are taking place and says the firm knows nothing about them.
The brokerage has long denied pressuring or asking money managers to pay for speaking or sales time. Rather, the firm has said in the past thatit does ask outside managers and product vendors to help pay for marketing expenses.
Most firms also require various support payments from vendors, including "revenue sharing" arrangements based on new sales or aged assets. Generally, these payments aren't disclosed even though under NASD Conduct Rule 2830(1), "special compensation arrangements" with dealers are supposed to be disclosed in a prospectus.
Specific payments from vendors supporting sales meetings are common in the industry as well, although the high price being charged for the Merrill meetings has several vendors griping.
"They are reaching deep into our pockets. I wouldn't do it if the business didn't pay off," says one money management firm executive involved with the program. "They sort of have you."