Prudential Securities informed its administrative managers at the beginning of the year that if they were also producing brokers, they were no longer going to be paid commissions, according to sources.
The firm confirmed that it instituted the policy, with a spokesman saying it was undertaken to “help administrative managers focus on their primary responsibility of supervision of the branch.”
The firm has about 200 administrative managers scattered across the U.S. They're in charge of administrative duties of the branch, including some supervisory work, as well as other duties like making sure margin calls are handled properly. Some, however, had a book of business to generate a second income. Some of those were brokers who decided to become administrative managers and kept their books.
What upsets some administrative managers more than anything is that while they've been told they're not going to be paid, branch managers, who are also supervisory, can still produce.
Because of the new policy, some of the administrative managers handed off their clients to other brokers at the firm. “If I'm not going to get paid on it, why keep the clientele?” says one administrative manager who was forced to drop his production work.
Others were more sanguine. “If the admin manager becomes too focused on running their own book, it takes away from the time they're supervising brokers in the office,” says an administrative manager. “It was a logical move, but phasing it in would have been easier for everyone.”