Merrill Lynch is no longer rewarding brokers for customer activity in its Visa Signature Rewards program.
Reps previously received points based on how much money their clients spent, according to brokers. But beginning this year, the firm stopped giving those points as well as points brokers earned for using their own Rewards account.
While all CMA customers receive a plain vanilla Visa card, they can upgrade to the Visa Signature Rewards program for an annual fee of $175, according to a Merrill broker in Connecticut. The premium card is “phenomenal” for its discounts, frequent flier miles and other rewards it offers cardholders, the rep says.
“This is typical Merrill,” complains a broker based in the Northwest. “They launched the Visa Signature Rewards program as a client-retention tool, and once everyone was signed on, they tell us they're not going to pay us anything.”
This broker suspects the rewards program became less profitable for the firm as cardholders started cashing in points.
“Merrill is telling us that we don't influence the client's spending, and therefore we shouldn't be rewarded for it,” scoffs a producer in the Midwest. “It's not a huge amount of money, but I'm going to lose $9,000 this year because of this change.”
Merrill brokers have been especially sensitive about compensation issues lately. Also beginning this year, the firm increased the household minimum to get paid on transaction business from $50,000 to $100,000. Merrill is planning further pay changes next year. Firm officials have said they want to simplify the pay plan.
A Merrill spokesperson did not return calls seeking comment for this article.
In a January conference call explaining the firm's quarterly results, Merrill CFO Tom Patrick told analysts the firm is examining its spending, but definitely does not want to trim broker paychecks. “In this highly competitive market for talented professionals, we are committed to attracting and retaining the best people to serve clients,” Patrick said.