ML Brokers Pissed about BofA Coup

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burtonfinancial1's picture
Joined: 2008-09-30

hot off the presses... saw on Business Insider dated 6/3ML Brokers Pissed about Huge Changes at the firmHuge changes are planned for Bank of America's Merrill Lynch. The
head of the legendary 16,000 person brokerage unit--often referred to
as "the thundering herd"--is being ousted in favor of a Bank of America
insider, according to a person familiar with the matter. Changes in the
way brokers are compensated will likely make pay less transparent and
less reliable.
Many brokers are still unaware of the planned changes, which have
not been announced internally or to the public. It is always possible
that last minute maneuvers could result in Sontag keeping his position
or the compensation changes being halted.
Dan Sontag, a thirty year veteran of Merrill Lynch who now heads it
Global Wealth & Investment Management unit, will leave the firm
shortly, sources says. He was elevated to the top position at Merrill's
brokerage after the departure of Bob McCann following the merger with
Bank of America. His replacement is likely to be Keith Banks, who ran
the BofA wealth management business prior to the merger. Banks was
essentially demoted and placed under Sontag following the merger, a
move many believed was aimed at reassuring Merrill brokers that they
would be treated well in the new corporate structure.
Rumors that Sontag, who worked closely with McCann for years and was
seen as an ally of the Merrill financial advisers, will be replaced by
Banks, who is viewed as an ally of the Bank of America executives, is
already roiling the financial advisers.
"There's a theory that the financial advisers have nowhere else to
go," a person familiar with the situation said. "This is wrong. Morgan
Stanley Smith Barney and Goldman are hiring. The FAs are all going to
leave."
Perhaps more important than the managerial reshuffle are the changes
planned to the way financial advisers are compensated. At Merrill
Lynch, the FAs were paid according to what is called an "eat what you
kill" basis. Brokers accumulated points for selling products to
customers and bringing more money under management of Merrill. Each
month, brokers were paid based on these points. It was a highly
transparent form of compensation that brokers had come to rely upon.
The new system would pay the FAs closer to the way investment
bankers are paid, with a small annual salary and a larger end of year
bonus. The bonus, however, may be limited by government restrictions on
pay at firms operating with TARP funding. It is thought that the
controversial retention bonuses Bank of America promised brokers,
promises which predated the TARP pay restrictions, may be exempt from
these limits.
The change in pay is described as "revolutionary" by insiders. For
years, many Merrill FAs have viewed themselves as partners with the
firm, almost outside consultants who share revenue from their clients
with the firm in exchange for use of the Merrill brand and back-office
services. Under the new compensation structure, they will be treated
much more like ordinary employees.
"This is really pissing people off," said one insider. "These guys
all across the country are basically being told they are being turned
into branch offices of Bank of America."

Greenbacks's picture
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Sorry, but my heart will never bleed for a ML rep!  Most of them have ego's the size of Texas. Makes you want to puke when you would talk to them.
There has been a lot of crap that hit the fan over the last two years but the day ML was sold, to me that was a great day  

NOVA's picture
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Burton - thanks for sharing.  I wonder who's next?

buyandhold's picture
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In other news, cats are mad at dogs for chasing them.

Chazzy's picture
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Greenbacks wrote:Sorry, but my heart will never bleed for a ML rep!  Most of them have ego's the size of Texas. Makes you want to puke when you would talk to them.
There has been a lot of crap that hit the fan over the last two years but the day ML was sold, to me that was a great day  Not a ML rep - yet - but you are an a-hole. Were you picked on as a kid??

troll's picture
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Chazzy wrote: Greenbacks wrote:Sorry, but my heart will never bleed for a ML rep!  Most of them have ego's the size of Texas. Makes you want to puke when you would talk to them.
There has been a lot of crap that hit the fan over the last two years but the day ML was sold, to me that was a great day  Not a ML rep - yet - but you are an a-hole. Were you picked on as a kid??
 
 
He's right. ML brokers are the most arrogant sob's and they deserve everything that they get.

burtonfinancial1's picture
Joined: 2008-09-30

I think the most screwed advisors in the whole ML and B of A world are the legacy BAI FAs...paid like bank advisors but now working in a wirehouse world, cuts everywhere, leads gone, etc. Missing about 10-15 bps on the grid just for being on the wrong side of the deal right now. 

burtonfinancial1's picture
Joined: 2008-09-30

It's interesting to see moves like this that further undermine Merrill Lynch in my opinion. I thought BofA acquired ML because they brought incredible people and strength. So now they want outsiders?? Bank of America hires top economist, strategy chief

Mon Jun 1, 7:37 am ET

NEW YORK (Reuters) –
Bank of America Corp's (BAC.N) corporate and investment banking unit has hired Ethan Harris as head of North America economics
and David Bianco as head of U.S. equity strategy, two of the
highest-profile appointments since the acquisition of Merrill Lynch
& Co.

Harris joins Banc of America Securities-Merrill Lynch Research from Barclays Plc's (BARC.L) Barclays Capital
unit, where along with Dean Maki he was chief U.S. economist and head
of U.S. economic research. Maki will retain those roles, Barclays said
in a separate statement.

Harris had since 2003 been chief U.S. economist at Lehman Brothers Holdings Inc (LEHMQ.PK)
before that company went bankrupt and Barclays bought some of its
operations. Before joining Lehman in 1996, Harris worked at the Federal Reserve Bank of New York and at JPMorgan (JPM.N).

Bianco joins from UBS AG
(UBSN.VX), where he had been chief U.S. equity portfolio strategist and
head of U.S. valuation and accounting research. Before joining UBS, he
worked at Deutsche Bank AG (DBKGn.DE) and Credit Suisse First Boston (CSGN.VX).

Harris will join Bank of America in September, and Bianco in July. Both will report to Adam Quinton, head of global macro research. Reuters had reported Harris' hiring.

The hirings come as Bank of America integrates Merrill Lynch, which it acquired on January 1. Several top executives had since left, including chief North American economist David Rosenberg, who departed in March for Canadian wealth management company Gluskin Sheff & Associates Inc (GS.TO).

On May 11, Kenneth Lewis, Bank of America's chief executive, said on a
conference call that "we have lost some people that we did not want to
lose" at Merrill. "On the other hand, business is really good."

Chazzy's picture
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Alice Cooper wrote:Chazzy wrote: Greenbacks wrote:Sorry, but my heart will never bleed for a ML rep!  Most of them have ego's the size of Texas. Makes you want to puke when you would talk to them.
There has been a lot of crap that hit the fan over the last two years but the day ML was sold, to me that was a great day  Not a ML rep - yet - but you are an a-hole. Were you picked on as a kid??
 
 
He's right. ML brokers are the most arrogant sob's and they deserve everything that they get. I add you to the a-hole list then too

onthemove's picture
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The domino's are beginning to fall...it was such a wonderful industry for such a long time...

cutacheck's picture
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Anyone read this.

Bank Of America Denies Our Merrill Shakeup Story (BAC)
http://shar.es/bfQ4

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It amazes me how many of you love to stereotype people based on poor experiences you may have had with someone.

In every industry and occupation, there are "arrogant snobs." I'm a ML advisor, and yes, are there some arrogant people I work with - sure, but how is that different than any other firm? I've interacted with PLENTY of arrogant SB, MS, UBS, etc. advisors with egos a mile long. It doesn't mean I'll characterize everyone at their firm in that mold - it just simply means that PERSON is someone I'd rather not deal with or model myself or business after.

How hard of a concept is this to understand?

And BTW, anyone who believes this article from this moron at Clusterstock deserves to take the bait. This is nothing but rumor on his part and the mere fact that he takes a preemptive "cover your *ss" statement like, "the situation may change due to late maneuvering..." makes me think he has even less credibility. This guy is an Internet blogger that doesn't even come close to understanding the ML comp structure. There is no such thing as "points" for compensation at ML... it's simply Production Credits and how you're paid on them relative to your grid - same as any other firm.

Also, did it ever occur to this wacko that if BofA was to make such dramatic changes to essentially the "crown jewel" of the entire merger transaction (namely, ML's wealth management unit and even more importantly, it's advisors), that most of the top producers would just simply walk?

Omar's picture
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I believe that article is false and B of A is going to release a statement to its employees denying that rumor today.

However, if you are ML, I can assure you that your compensation plan will change as a result of the merger. It may not happen right away and it won't be salary + bonus, but it will change to where you are going to have to hit certain "bank product buckets" in order to receive your full comp. Trail/fee holdbacks are typical.

For those of you that think threatening to leave will change their minds, don't hold your breath. So far, lots of big producers at both ML and BAI have jumped ship and management has not responded. It's frustrating, but B of A has always cut pay when it acquired a firm in the past. As have, always will.

I can say so far that it seems the ML guys are getting more of the benefits from the merger than are the BAI guys. I hear they are getting high balance leads and CD maturity leads to call on. Now, I know most of those leads are prospects that have been worked in the past, but leads are leads.

On a side note, I know many ML guys that are fine and can't say that they have egos. Let's face it, as Advisors in general, we are all competitive and this business can make us A$$holes from time to time. It's better that we stick together as in industry and keep a positive image for our clients. Worse thing you can do is bad mouth another broker or company during these tough times.

burtonfinancial1's picture
Joined: 2008-09-30

Omar, you are correct. I saw the response above and pasted the text here. I have no dog in this hunt to be clear. This back and forth is a riot!Bank Of America Denies Our Merrill Shakeup Story (BAC)
John Carney|Jun. 3, 2009, 5:07 PM|12Print
Tags:
Wall Street,

Financial Services,

Merrill Lynch,

Bank of America
Bank of America (BAC) sent out an internal email to employees today
warning them that a false story was circulating about Merrill Lynch.
The email memo went out to employees across America around 1 P.M.
today, warning employees to be wary of a story about the firm that the
memo said was "fictitious."
We have a feeling that this was Merrill's way of trying to calm its
employees' worries over our story about the impending departure of
brokerage head Dan Sontag and changes to compensation. Earlier today
Merrill Lynch declined our offer to give the firm space for on the
record comments denying any specific details of our story.
Now spokeswoman Selena Morris claims the story isn't true, according to TheStreet.com's Dan Freed.
"It's completely without merit," Morris tells Freed. She apparently
declined to offer specifics to Freed either, so its hard to tell which
part of the story she is denying.
We stand by our story, and we are confident in the accuracy of our
reporting and our sources. As we noted in our original story, the
planned management shakeup and changes to compensation could be undone
by "last minute maneuvers." One possibility is that the firm will
scramble to cover for itself after seeing the reaction to our
publication of the management and compensation plans. If anything,
we're hearing that the turmoil at the firm is only increasing, with big
time financial advisers contemplating leaving.
Sontag could not be reached directly.

kappa1997's picture
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What a dumb story. Clearly its sensationalism on behalf of the author. Every one take notice, if its happens at ML it will happen to other firms within two years.

burtonfinancial1's picture
Joined: 2008-09-30

The rumor about potential compensation changes at ML/BofA down the road is really not isolated to that company. For years foreign owned firm's have had heated boardroom brawls over US broker comp.  HSBC's US wealth management for example has talked about implementing the Euro compensation model as it is in the UK and other markets. The have not because of how distasteful and anti business it would be. They'd loose the entire sales force.  FAs in the UK, Germany and other countries are paid much more like bankers. Base + bonuses on gross rev, + bonuses for growth, etc.  If you don't grow, about 1/3rd of your variable comp could be bye bye in a given year.  With near draconian intervention and control from the current White house, there's a great deal of pressure to amend compensation.  There's a strong gravitational pull to 'level' off what an FA can earn so to speak. Even more reason I think independence will continue to be THE route to go.

Borker Boy's picture
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Let's face it, FAs are paid FAR more than they should be for the actual work performed.
 
This fleecing of the public can't continue forever. 
 

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Does that mean doctors, dentists, CPAs, and attorneys are overpaid too?  I only see my doctor when I'm sick and he charges me or my insurance a few hundred dollars for 15 minutes.  I see my dentist for about 10 minutes all year long but he still charges me or my insurance a couple of hundred dollars for his services.  My CPA buddy tells people to use quickbooks and uses a more advanced version of turbo tax to do taxes.  He charges a few hundred dollars to do a tax return.  I paid my attorney over $1000 to do a simple will a few years ago.  Haven't spoken with him since. 
So, what's your barometer for getting paid far more than we should for the actual work performed?

burtonfinancial1's picture
Joined: 2008-09-30

You ask a question most of us here would find laughable.. but common sense and free markets are as vanishing amidst this overwrought government intrusion upon virtually every large American enterprise in and effort to take care of us all like babies.   Ask the same question in a year after Obama has his way with congress with this push for socialized medicine.  Ask your Dentist or doctor how comfortable he or she is with the future free market earning potential.  I have 2 in my family who are freaking out.  Moreover, half of us here are probably working for tarped up firms or at least did in the last year. Unless you're building cars in America, who else has lost or given up more control over their business than our industry?? Boards and CEOs are making far fewer key decisions than they used to on things that affect comp. I don't like any talk of tampering with my ability to eat what I hunt either. But, let's admit this, the environment is not the same today as it was even a year ago. It's not crazy to think the model will continue to evolve at the banks/wires just as it did in many ways over the last decades if you look back 10, 20, 30 years.  My Dad's 'good old days' as a broker are chock full of stories and realities that no longer exist for us in the biz.

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Spaceman Spiff wrote:
Does that mean doctors, dentists, CPAs, and attorneys are overpaid too?  I only see my doctor when I'm sick and he charges me or my insurance a few hundred dollars for 15 minutes.  I see my dentist for about 10 minutes all year long but he still charges me or my insurance a couple of hundred dollars for his services.  My CPA buddy tells people to use quickbooks and uses a more advanced version of turbo tax to do taxes.  He charges a few hundred dollars to do a tax return.  I paid my attorney over $1000 to do a simple will a few years ago.  Haven't spoken with him since. 
So, what's your barometer for getting paid far more than we should for the actual work performed?
 
You're comparing apples to asphalt, Spiff. Come on, man.

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I too was wondering how you compare Doctors, Dentists and CPA's with used car salespeople.

buyandhold's picture
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Spaceman Spiff wrote:Does that mean doctors, dentists, CPAs, and attorneys are overpaid too?  I only see my doctor when I'm sick and he charges me or my insurance a few hundred dollars for 15 minutes.  I see my dentist for about 10 minutes all year long but he still charges me or my insurance a couple of hundred dollars for his services.  My CPA buddy tells people to use quickbooks and uses a more advanced version of turbo tax to do taxes.  He charges a few hundred dollars to do a tax return.  I paid my attorney over $1000 to do a simple will a few years ago.  Haven't spoken with him since. 
So, what's your barometer for getting paid far more than we should for the actual work performed?Spiff, you only see the dentist for 5 minutes a year?! Don't you get your teeth cleaned twice a year like you're supposed to? Geez, next you'll tell me you don't go in for a semiannual portfolio checkup!By the way, the reason your doctor charges you 400 bucks a pop is because the insurance covers it. If it came out of our pocket, doctors would make far less, imo. Most of them are no more skilled than your typical auto mechanic, after all.

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Many Changes are coming.  October is doomsday for BAI FA's that are less then $400k production.  Anyone left will be moved onto ML platform then on Jan 1 everybody will be paid a salary + bonus like the PWM advisors. 

tmoney47's picture
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today my director fowarded an email that was probably sent to all the directors firm wide regarding the article in business insider.  a senior fa from the mid west  wrote ken lewis asking if indeed dan santog was leaving the firm.....  lewis remarked saying that was not true and trash.

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buyandhold wrote:
Spaceman Spiff wrote:Does that mean doctors, dentists, CPAs, and attorneys are overpaid too?  I only see my doctor when I'm sick and he charges me or my insurance a few hundred dollars for 15 minutes.  I see my dentist for about 10 minutes all year long but he still charges me or my insurance a couple of hundred dollars for his services.  My CPA buddy tells people to use quickbooks and uses a more advanced version of turbo tax to do taxes.  He charges a few hundred dollars to do a tax return.  I paid my attorney over $1000 to do a simple will a few years ago.  Haven't spoken with him since. 
So, what's your barometer for getting paid far more than we should for the actual work performed?Spiff, you only see the dentist for 5 minutes a year?! Don't you get your teeth cleaned twice a year like you're supposed to? Geez, next you'll tell me you don't go in for a semiannual portfolio checkup!By the way, the reason your doctor charges you 400 bucks a pop is because the insurance covers it. If it came out of our pocket, doctors would make far less, imo. Most of them are no more skilled than your typical auto mechanic, after all.yeah, most auto mechanics go to med school and residency for ten years.  what a moron

kappa1997's picture
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Do we really believe what Ken Lewis says these days?  I sure hope this salary things is false because it will spread industry wide. Then again fee based brokerage which has become so prevelant to our industry is basically a salary without bonous so maybe it isn't such a bad thing. And when markets decline like they have we don't take such a haircut. Then again we can't make more when the markets are rising. I guess salary isn't such a great idea.

The Oracle's picture
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Gauntlet, what's that based on? 

buyandhold's picture
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Hey, Draper.Mechanic/doctor -- same basic concept. Check the oil, steering fluid, all gauges, run a computer diagnostic/check blood pressure, send blood work to the lab -- in each case, follow checklist to figure out problem.Also, for every mechanic who screws up your car, there is a doctor who kills you because he missed something on the checklist.Thankyouverymuchhaveagreatday.

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gauntlet's lying...sub 300k maybe

Wildcat02's picture
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Borker Boy,
Are you f-ing serious? FA's, in most cases, work for peanuts initially to build their book of business.

Their first year or so in the business they live under constant scrutiny that they may not make the cut and get fired (90% attrition when starting out).

Then, after "making it" to the point where you're not worried about management just simply cutting you for not making your asset hurdles, you end up starting out off salary, probably making less than your assistant.

It takes a good 3-5 years to get your business up to a point of making any real money. I can't think of many professions where people put so much on the line to do what we do to finally make a good living.

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tmoney47 wrote: today my director fowarded an email that was probably sent to all the directors firm wide regarding the article in business insider.  a senior fa from the mid west  wrote ken lewis asking if indeed dan santog was leaving the firm.....  lewis remarked saying that was not true and trash.

tmoney - got the same e-mail as well.

Amazing how these "journalists" can get away with posting such false information and actually get paid for what they do.

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buyandhold wrote:Hey, Draper.Mechanic/doctor -- same basic concept. Check the oil, steering fluid, all gauges, run a computer diagnostic/check blood pressure, send blood work to the lab -- in each case, follow checklist to figure out problem.Also, for every mechanic who screws up your car, there is a doctor who kills you because he missed something on the checklist.Thankyouverymuchhaveagreatday.
I don't think you really understand what doctors do.

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Wildcat02 wrote:It amazes me how many of you love to stereotype people based on poor experiences you may have had with someone. In every industry and occupation, there are "arrogant snobs." I'm a ML advisor, and yes, are there some arrogant people I work with - sure, but how is that different than any other firm? I've interacted with PLENTY of arrogant SB, MS, UBS, etc. advisors with egos a mile long. It doesn't mean I'll characterize everyone at their firm in that mold - it just simply means that PERSON is someone I'd rather not deal with or model myself or business after. How hard of a concept is this to understand? And BTW, anyone who believes this article from this moron at Clusterstock deserves to take the bait. This is nothing but rumor on his part and the mere fact that he takes a preemptive "cover your *ss" statement like, "the situation may change due to late maneuvering..." makes me think he has even less credibility. This guy is an Internet blogger that doesn't even come close to understanding the ML comp structure. There is no such thing as "points" for compensation at ML... it's simply Production Credits and how you're paid on them relative to your grid - same as any other firm. Also, did it ever occur to this wacko that if BofA was to make such dramatic changes to essentially the "crown jewel" of the entire merger transaction (namely, ML's wealth management unit and even more importantly, it's advisors), that most of the top producers would just simply walk?
 
I agree, I don't work for ML, but at SB.  You get arrogant snobs in all types of firms, I have meet plenty of Indy's that thought there stuff didn't stink too.  I think most of the bad items on wirehouses posted on this board are from people who are Indy's trying to justify their exisitence or some who was booting for not cutting it.   I swear I think some of them have a inferiority complex.

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Don Draper wrote:
buyandhold wrote:Hey, Draper.Mechanic/doctor -- same basic concept. Check the oil, steering fluid, all gauges, run a computer diagnostic/check blood pressure, send blood work to the lab -- in each case, follow checklist to figure out problem.Also, for every mechanic who screws up your car, there is a doctor who kills you because he missed something on the checklist.Thankyouverymuchhaveagreatday.
I don't think you really understand what doctors do.

I have to agree with Don.

The human body is infinitely more complex than a vehicle. Damn, haven't you ever seen House?

Also, the reason you pay your doctor so much has nothing to do with whether insurance will pay it. It's basic economics. Why do we pay more for some things and not others? Scarcity. A physician passes difficult exams under pretty intense circumstances. They have the ability to do what others do not. Mechanics follow a different path, one that many more have the ability to do.

A great example is college coaches v. professors.   Why does Mike Alphabet soup from Duke get paid more than a brilliant economics professor from the same school? He has the ability to do what others do not. Win basketball games.

Borker Boy's picture
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Well said, Morean. Economics 101 in two paragraphs. Brilliant.

buyandhold's picture
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Moraen wrote:

A great example is college coaches v. professors.   Why does Mike Alphabet soup from Duke get paid more than a brilliant economics professor from the same school? He has the ability to do what others do not. Win basketball games.
Coach K gets X Million per year 1) Because you can't pay the producers -- the players -- so there is money available to throw at him.2, the big reason) The people who write the checks at Duke have a hard-on for basketball. There is no *economic* reason to pay Coach K that kind of money. Studies have shown that there is no economic benefit to winning college basketball games for a university. It's a net zero revenue producer.

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buyandhold wrote:
Moraen wrote:

A great example is college coaches v. professors.   Why does Mike Alphabet soup from Duke get paid more than a brilliant economics professor from the same school? He has the ability to do what others do not. Win basketball games.
Coach K gets X Million per year 1) Because you can't pay the producers -- the players -- so there is money available to throw at him.2, the big reason) The people who write the checks at Duke have a hard-on for basketball. There is no *economic* reason to pay Coach K that kind of money. Studies have shown that there is no economic benefit to winning college basketball games for a university. It's a net zero revenue producer.

Untrue. If there were thousands of Coach K's, basketball coaches would get paid less. Think about it, if you are a booster would you pay more for Coach K, when you could pay less for Coach Y? Not likely.

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Moraen wrote: buyandhold wrote:
Moraen wrote:

A great example is college coaches v. professors.   Why does Mike Alphabet soup from Duke get paid more than a brilliant economics professor from the same school? He has the ability to do what others do not. Win basketball games.
Coach K gets X Million per year 1) Because you can't pay the producers -- the players -- so there is money available to throw at him.2, the big reason) The people who write the checks at Duke have a hard-on for basketball. There is no *economic* reason to pay Coach K that kind of money. Studies have shown that there is no economic benefit to winning college basketball games for a university. It's a net zero revenue producer.

Untrue. If there were thousands of Coach K's, basketball coaches would get paid less. Think about it, if you are a booster would you pay more for Coach K, when you could pay less for Coach Y? Not likely.I'll try to find some studies that back me up. As to the Coach K/Coach Y argument -- if I could make $1 million a year paying for Coach K to win a title, or $1 million a year paying for Coach Y to finish .500, then there is no economic benefit to paying Coach K more. In fact, that money is wasted, since it could be used to create economic benefit elsewhere.You have to remember that college athletics is revenue neutral and simply don't generate revenue for the colleges.

Anonymous's picture
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B&H,
 
You should read your example again I think. 

buyandhold's picture
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iceco1d wrote:B&H,
 
You should read your example again I think.  Yeah, I was typing faster than I was thinking. Not sure I made the point I wanted to make anyway.One thing I was wrong is that some college basketball programs do produce revenue. That revenue has to be kept within the athletic department (that's where I got the revenue neutral statement, which is wrong.)The most profitable college programs, according to a Forbes article, are Kentucky, North Carolina, Duke ... the big names. Obviously Coach K made Duke what it is, so in that sense he is worth what he is paid. Kentucky is profitable because of its tradition and the work that others have done, so you probably wouldn't want to pay the coach there as much. Kentucky wins largely because it is Kentucky and has such a great tradition and infrastructure.

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buyandhold wrote:
iceco1d wrote:B&H,
 
You should read your example again I think.  Yeah, I was typing faster than I was thinking. Not sure I made the point I wanted to make anyway.One thing I was wrong is that some college basketball programs do produce revenue. That revenue has to be kept within the athletic department (that's where I got the revenue neutral statement, which is wrong.)The most profitable college programs, according to a Forbes article, are Kentucky, North Carolina, Duke ... the big names. Obviously Coach K made Duke what it is, so in that sense he is worth what he is paid. Kentucky is profitable because of its tradition and the work that others have done, so you probably wouldn't want to pay the coach there as much. Kentucky wins largely because it is Kentucky and has such a great tradition and infrastructure.

At some point, if they are not paying for a coach that wins games at Kentucky that well, attendance will fall, or boosters will get upset, and not contribute. Recruitment will go down, top prospects will go to other places, etc.

Seriously, it's about scarcity. If Coach K didn't win games, they would stop paying him so much (and fire him). It's "what have you done for me today?" thing. By the way, I've met him and he's a lot taller than he looks on TV.

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I call bs on Coach K being taller than he looks, next you'll say that Duke players don't flop on defense.  Kentucky will be winning again soon, now that they have Calipari and his rule bending ways.  How do you land the #1, #2, #22, and #23 recruits in the land and two other highly recruited players. 

Moraen's picture
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jkl1v1n6 wrote: I call bs on Coach K being taller than he looks, next you'll say that Duke players don't flop on defense.  Kentucky will be winning again soon, now that they have Calipari and his rule bending ways.  How do you land the #1, #2, #22, and #23 recruits in the land and two other highly recruited players. 

Unfortunately, I don't really know that much about basketball, so I have no idea what you are talking about. I was looking at it from a purely academic standpoint. I figured something where I had no bias was the best thing to talk about.

Greenbacks's picture
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Wow did this thread head off course or what
 
Look at the advertisement at the top of this page, I think Rep magazine is looking at the wrong end of the Bull!
 
If you are a ML rep you got shoved up the other end of the Bull. Hope you like it   in there.
 

deekay's picture
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Greenbacks wrote:Wow did this thread head off course or what
 
Look at the advertisement at the top of this page, I think Rep magazine is looking at the wrong end of the Bull!
 
If you are a ML rep you got shoved up the other end of the Bull. Hope you like it   in there.
 
 
Yeah, we get it, Greenbacks.  You hate wirehouses.  JFC, talk about a one-trick pony. 

Behavioral_FA's picture
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If you think ML FAs are the only ones who are arrogant and selfish. Think again.
 
Numbers don't lie. Go look at the number of threads/posts on the FA Forum home page that revolve around the actual client experience vs. babbling nonsense by the majority of FAs here.
 
It is 1905 vs 60.
 
I worked at ML for 7 years. I learned more and was around some of the most talented brokers in the industry. It was one of the most profitable and best experiences of my life. I will even go as far as to say that it completetly changed my life. The culture at that time was second to none. I was fortunate and graduated early from PDP all on my own. It was hard, but worth it.

Bank of Amerrill's picture
Joined: 2009-01-27

What was the topic again?

jkl1v1n6's picture
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Joined: 2008-10-06

Coach K's elevator shoes. 

Moraen's picture
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Behavioral_FA wrote: If you think ML FAs are the only ones who are arrogant and selfish. Think again.
 
Numbers don't lie. Go look at the number of threads/posts on the FA Forum home page that revolve around the actual client experience vs. babbling nonsense by the majority of FAs here.
 
It is 1905 vs 60.
 
I worked at ML for 7 years. I learned more and was around some of the most talented brokers in the industry. It was one of the most profitable and best experiences of my life. I will even go as far as to say that it completetly changed my life. The culture at that time was second to none. I was fortunate and graduated early from PDP all on my own. It was hard, but worth it.

There is arrogance, and then there is arrogance. I think you don't understand what these forums are about. These boards are for advisors to talk about what they want. This particular set of threads is about "What's up at firms". My guess is that if you looked under the "Clients" area, then the numbers would be less skewed.

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buyandhold wrote:
Moraen wrote:

A great example is college coaches v. professors.   Why does Mike Alphabet soup from Duke get paid more than a brilliant economics professor from the same school? He has the ability to do what others do not. Win basketball games.
Coach K gets X Million per year 1) Because you can't pay the producers -- the players -- so there is money available to throw at him.2, the big reason) The people who write the checks at Duke have a hard-on for basketball. There is no *economic* reason to pay Coach K that kind of money. Studies have shown that there is no economic benefit to winning college basketball games for a university. It's a net zero revenue producer.

How is there no economic reason for paying Coach K what he makes? Do you have any idea how much revenue Duke's mens basketball program generates for the university. I'd venture an educated guess that it's north of $20 million a year. Coach K's presence as Duke's coach is every bit a reason for that.

Now, I'm the first to admit that professional athletes are extremely overpaid, but the fact is, they justify their enormous pay per the revenue they generate for their respective organizations. This is capitalism, plain and simple.

Advisors are no different. Most advisors generate 1.5 to 2 + times the revenue at their firms than what they make in compensation. It's merely pay for performance.

Wildcat02's picture
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buyandhold wrote:
Moraen wrote: buyandhold wrote:
Moraen wrote:

A great example is college coaches v. professors.   Why does Mike Alphabet soup from Duke get paid more than a brilliant economics professor from the same school? He has the ability to do what others do not. Win basketball games.
Coach K gets X Million per year 1) Because you can't pay the producers -- the players -- so there is money available to throw at him.2, the big reason) The people who write the checks at Duke have a hard-on for basketball. There is no *economic* reason to pay Coach K that kind of money. Studies have shown that there is no economic benefit to winning college basketball games for a university. It's a net zero revenue producer.

Untrue. If there were thousands of Coach K's, basketball coaches would get paid less. Think about it, if you are a booster would you pay more for Coach K, when you could pay less for Coach Y? Not likely.I'll try to find some studies that back me up. As to the Coach K/Coach Y argument -- if I could make $1 million a year paying for Coach K to win a title, or $1 million a year paying for Coach Y to finish .500, then there is no economic benefit to paying Coach K more. In fact, that money is wasted, since it could be used to create economic benefit elsewhere.You have to remember that college athletics is revenue neutral and simply don't generate revenue for the colleges.

Okay, to support my other post, here is a link to a study done on Duke athletics and the revenue all of the programs generate:

http://www.math.duke.edu/~hain/athletics/

How you make a comment that college athletics is "revenue neutral" is mind-boggling. Why would any school with any iota of business sense continue to fund a program that makes no money?

And coming from another school that has a premier basketball program myself, trust me, there is a BIG difference between having support (read: increasing revenue) for a .500 program and one that wins national titles. BIG DIFFERENCE, and it's not even close.

Show me a program with 5-10 years of .500 performance and I'll show you one with an apathetic fan base that gets zero television exposure.

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