Prudential Securities seems to be leading the charge in the undeclared bidding war for brokers.
"It's the craziest thing," says a Prudential rep on the West Coast. "They'll pay 150 percent of gross, and they won't spend one dime to retain."
Historically, industry recruitment bonuses have been 40 percent to 50 percent of trailing 12-month's production, paid in the form of a forgivable note. Now the market is closer to 100 percent, even for average producers. And Prudential often goes higher, brokers say.
"The deals we're paying people to come here are unbelievable--150 percent of gross," says a Prudential broker in Florida. "The talk among Pru brokers is that they can't believe the firm is paying people this much."
Another rep says the firm paid more than 2 million dollars for a million-dollar producer based on one strong quarter and the recruit's lost deferred compensation.
Brokers cite the firm's cost-cutting measures and preoccupation with the demutualization of Prudential Insurance as negatives in attracting reps. This translates into the need for big bonus money.
"They can't get them to come any other way," says the West Coast Prudential broker.