Merrill Lynch Production report

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eman07's picture
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Joined: 2009-05-18

Can a Merrill rep, or someone else who's seen these things help me understand a Merrill "Core Summary Report".Before you call me stupid for my questions, I work with an RIA and have for 6 years.  I simply have been detached from the broker lingo my entire career.  I am now considering teaming up with a Merrill Rep to go independent, and I'm trying to learn more about his current book.  He's near retirement, we would be doing this so I could take over his book.I've attached a file that I made that is the basics of his report that he gave me.  I changed some numbers a little to protect him.Here are my questions from this report:1.  Does this report tell you anything about the individual?  Are they underproducing off of this AUM base?  2.  Is there a way to tell how much of the 77M AUM is fee-based, or annuitized?  It has the PCs off of the Annuitized assets, but I don't know how to translate that.  One thing I'm sure that this is telling me is moving more of his clients to annuitized would drastically increase production?3.  Explain to me the relationship between PCs and Revenue?I know there would be more question I'll have, but I'll see if I can get some answers to the above first.  Thanks guys!

eman07's picture
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Joined: 2009-05-18

Pretty please?  I know they are basic questions to most of the brokers out there.  I'm sorry that I'm ignorant on the issue!

donatello's picture
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Joined: 2007-12-22

The production report shows you several things---that this person has appx 1/2 in annuitized business, has not added a priority client this year, and has lost 6 million in biz. It also shows pretty good revenue, which is the amount you would keep if you went independent. The production shows the haircut at Merrill.

donatello's picture
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Joined: 2007-12-22

How long has this person been in production? That will tell you if it's good or not. This looks ok for a 7 year to 8 year production. $280k is PC's off annuitized production.

ABOM's picture
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Joined: 2008-11-01

don you got some of that wrong.The PC's are what most people call gross. The revenue is a more accurate picture of what is going to mother-merrill, it includes account fees, spreads on margin and security back lending, spread on money markets, and retention that merrill keeps on other products such as annuities etc...yes moving AUM to annuitized would up the production but if he has been at MER a while he may have alot of inheited accounts or old clients that they would be difficult to do. Can you have him show you the AUM and Production of his top 25 households? thats what you really want to see.hope that helps.

Popeye $'s picture
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Joined: 2009-06-30

eman:You can tell alot from this report. First and foremost I can tell you are a douche bag for posting somebody else's personal information on a public forum.  Hopefully, you have more respect for your clients privacy.

eman07's picture
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Joined: 2009-05-18

Popeye $ wrote:eman:You can tell alot from this report. First and foremost I can tell you are a douche bag for posting somebody else's personal information on a public forum.  Hopefully, you have more respect for your clients privacy.
The numbers are changed, like I said.  I was simply using the form and constructing a replica of numbers so that I could get an understand of how the report works.  I don't think that's out of line at all.

Northfield's picture
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Joined: 2007-04-10

Revenue is not very telling. As ABOM mentioned it includes account fees, interest spread, banking and prop/structured product sales,etc. Essentially more important in determing profitability of an FA for corporate Merrill.
Production is the number this guy gets paid off and is more relevant to you.
 
As an RIA Annuitized production (PCs) is of most importance to you as it relates mostly to fee business. However, it also includes brokerage products that create recurring commissions, such as "C" shares and annuities.
 
You could ask for an annuitized business report that will show the breakdown in more detail to determine what types of fees are driving annuitized PCs. He/she will know how to obtain such a report.
 
I would expect the velocity (annuitized pcs/annuitized assets) to be greater than 1% and hopefully 1.5%. If not, this person has discounted fees in an effort to move clients into a fee platform. Do not expect that they would pay more in a move to an RIA platform.
 
If his annuitized fees are driven by seperate account managers, the move to your platform could be awkward. Conversely if the fees are driven by mutual fund wraps (MFA program) or discretionary (PIA program) the move to your platform would be extremely smooth.
 
I hope this is helpful.

eman07's picture
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Joined: 2009-05-18

Northfield wrote:Revenue is not very telling. As ABOM mentioned it includes account fees, interest spread, banking and prop/structured product sales,etc. Essentially more important in determing profitability of an FA for corporate Merrill.
Production is the number this guy gets paid off and is more relevant to you.
 
As an RIA Annuitized production (PCs) is of most importance to you as it relates mostly to fee business. However, it also includes brokerage products that create recurring commissions, such as "C" shares and annuities.
 
You could ask for an annuitized business report that will show the breakdown in more detail to determine what types of fees are driving annuitized PCs. He/she will know how to obtain such a report.
 
I would expect the velocity (annuitized pcs/annuitized assets) to be greater than 1% and hopefully 1.5%. If not, this person has discounted fees in an effort to move clients into a fee platform. Do not expect that they would pay more in a move to an RIA platform.
 
If his annuitized fees are driven by seperate account managers, the move to your platform could be awkward. Conversely if the fees are driven by mutual fund wraps (MFA program) or discretionary (PIA program) the move to your platform would be extremely smooth.
 
I hope this is helpful.Thank you very much!

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