MSSB---No Layoffs!?!

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onthemove's picture
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Joined: 2005-08-07

Apparantly, during a conference call today James Gorman or Charlie Johnston said they would not have a FA layoff...aka UBS style. I guess they figure that with a small household policy and the changes to the grid and the $100 trade minimums, enough guys would starve and leave or get ticked and leave...

nestegg's picture
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Joined: 2007-06-14

Good to hear no layoffs at Citi Morg!

fritz's picture
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onthemove wrote:Apparantly, during a conference call today James Gorman or Charlie Johnston said they would not have a FA layoff...aka UBS style. I guess they figure that with a small household policy and the changes to the grid and the $100 trade minimums, enough guys would starve and leave or get ticked and leave...
 
Manager told me on Monday that there would be no cuts according to a call he was on.  My guess is the 3000 brokers that have already been smart, quit and took 40 billion in assets with them from SB made the decision to do nothing.  Can never understand in this business how management can never just leave things alone, they overreact to up moves and really overact to down moves.  Cutting people after the market has dropped 8000 points, "brilliant" then if/when it goes back to 12,000 we will start frantically hiring trainees again.  What a joke this business is.

Cowboy93's picture
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Joined: 2005-05-10

nestegg wrote: Good to hear no layoffs at Citi Morg!

You are so clever.

Wasabi Avenger's picture
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Joined: 2007-04-17

Wait: I'm sorry. Gorman said something, and you believed him?

Delmarva's picture
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Joined: 2009-03-21

Smith Barney does not need to fire any brokers. All they need to do is to reinstate the penalty box. Brokers doing less than $300K will paid 20% and the defections will increase.
When I first learned I would be in the penalty box I immediately started looking around. My eyes were opened. Raymond James ran some numbers for me and it looks like my payout would be around 64%. Even at my current payout of 34%, the difference is HUGE. My only cost would be health insurance and the self employment tax. I would receive a 1099 which would help greatly with deducting my business expenses on my income tax. Last year at Smith Barney my business expenses with mileage, coach and all came to about $20,000. Because of the AMT my deductions were virtually wothless. The Ray Jay manager would even supply me with CSA help.
RBC made me an offer but I did not want to be an indentured servant for six years. Much to my surprise, the local manager told me to make a counter offer.
 
It has become clear to me Smith Barney is looking for ways to reduce compensation to its brokers. A few years ago the firm had a policy where the payout was 20% on the first $5000 of gross commission per month. Brokers left and the plan was recinded. Now they are starting this penalty box crap. My honest feeling is they are evil and not to be trusted.
 
 

FawnLiebowitz's picture
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Joined: 2009-01-31

fritz wrote:[  Can never understand in this business how management can never just leave things alone, they overreact to up moves and really overact to down moves.  Cutting people after the market has dropped 8000 points, "brilliant" then if/when it goes back to 12,000 we will start frantically hiring trainees again.  What a joke this business is.
 
Fritz,
Best post I've seen in a while.  If these managers were some sort of fund managers, they'd be bottom quintile year after year...always zigging when they should be zagging...always.   The latest layoffs and firings should clearly indicate that this may be a brilliant time to be in this business longer term, just don't know which firm "gets this" (nestegg...here's where you chime in and say Stifel).  Some of these layoffs were justified, some were not.  At the end of the day, management always gets it wrong, that's why management is always advisor flunkee's, they can't handle the important task of actually managing people's money.  And this is why in 10 or 15 years from now we'll relive another banking/credit crisis.  This will be when the collective minds of these firms once again forget the lessons learned and get us all in a big mess once again.  Thanks Fritz, good post.

Stealth's picture
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Joined: 2005-03-17

Management in our Branch has started giving 4th and 5th quintilers 90-day probation, or else..................

Cowboy93's picture
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Joined: 2005-05-10

Stealth wrote: Management in our Branch has started giving 4th and 5th quintilers 90-day probation, or else..................

Which firm?

Stealth's picture
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Joined: 2005-03-17

SB

fritz's picture
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Joined: 2006-01-12

Stealth wrote:Management in our Branch has started giving 4th and 5th quintilers 90-day probation, or else..................
 
Trainees or everyone??  Can't imagine you would give a non trainee even a week notice, it would give him/her time to get everything lined up to leave and go somewhere else.  Think when they fire you if you take majority of your book and go somewhere else the firm loses...almost no matter what your gross is.

Lex123's picture
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Joined: 2006-10-26

Delmarva,
 
Smith Barney is not looking to "reduce compensation to brokers."  They WANT you to make a ton of money, because when you make money, they make money.  What they are trying to do is get rid of their underperformers -- like you.  If you're not doing $300K, SB is doing you a favor  by putting you in the penalty box.  It should serve as a wake up call that it's time to look for a new career.

Delmarva's picture
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Joined: 2009-03-21

Lex123:
 
So be it.

Say What's picture
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Joined: 2008-11-22

Lex,A guy is doing under $300k and he's automatically a loser? You don't care about his business model or returns? That comes across as arrogant. Any chance you want to rescind comment?

OS's picture
OS
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Joined: 2008-11-03

Stealth,

I heard the similar talk at my branch and from a more senior manager, Q4 and Q5 are soon to be out, and it doesn't matter if they're LOS 1 or LOS 30.

fritz's picture
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Joined: 2006-01-12

OS wrote:Stealth, I heard the similar talk at my branch and from a more senior manager, Q4 and Q5 are soon to be out, and it doesn't matter if they're LOS 1 or LOS 30.
 
Guess I would consider Q1 the luckiest for obvious reasons, then Q4 and Q5 tied for 2nd place...then the big losers are Q2, Q3, those guys are going to abused every which way but loose for the next few years until they cut the bottom 1/2 in a couple more years.  Anyone other than the 750K and up group are stupid if they stick around.

Redpen's picture
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Joined: 2005-08-07

Would you guys be willing as a branch manager to keep a guy doing 150 and give him 20% payout if he would stay. I would

Wasabi Avenger's picture
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Joined: 2007-04-17

Redpen wrote:Would you guys be willing as a branch manager to keep a guy doing 150 and give him 20% payout if he would stay. I wouldWho would work for that? His sales assistant is probably earning 50% more than him.

Lex123's picture
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Joined: 2006-10-26

Saywhat,
Rescind my comment?  No, I would like to expand it.  If your business model is to spend lots of time around the water cooler and leave at 4:01 then welcome to under $300K.  You can have great returns, but if you don't have any clients, who cares.  There are too many lazy people in this industry (and on this board) who seem to consider it their right to make large sums of money.  We are all grossly overpaid for what we do.  It's about time the firms did a house cleaning to keep those that are worthy of these ridiculous sums and get rid of those that are just punching the clock. 

Sellout21's picture
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Joined: 2009-01-04

You make some good points, but don't always confuse hard work with success in this business.  I believe whole-heartedly in creating your own opportunities, but good fortune and timing play a significant role in our industry.  There are plenty of advisors who inherited large books of business but have done very little to bring in new clients and assets.  Walk through a wirehouse and you'll find many second generation advisors managing a book their daddies built.  I don't fault these advisors nor do I envy them, but they certainly don't deserve the right to say they worked harder than others to get where they are.    

Squash1's picture
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Joined: 2008-11-19

MS newbies told to get on a team before it's too late in northwest

awesome's picture
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Joined: 2007-01-04

Here's a translation for you. My assistant manager brought me in and said. "You've done well. What are you doing different?" I replied, "I think the market finally gave my whales a reason to change."

"Well, whatever it is keep doing it. Oh by the way, Gorman isn't laying off anybody through this transition, he just isn't letting anybody transition. You'll be out of a job by June 1st. I thought you should know, with your family and all."
 
Long story short. There are no layoffs. There are no "cuts." just penalty boxes and lack of hiring at the new firm. Good luck everyone! Notice in the conference calls they said we'll be terminated from the old firm (so we get 401k rollover and pensions, etc...), but they never said, "and you'll also be rehired."

Conrad Dobler's picture
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Joined: 2009-01-11

awesome wrote:Here's a translation for you. My assistant manager brought me in and said. "You've done well. What are you doing different?" I replied, "I think the market finally gave my whales a reason to change."

"Well, whatever it is keep doing it. Oh by the way, Gorman isn't laying off anybody through this transition, he just isn't letting anybody transition. You'll be out of a job by June 1st. I thought you should know, with your family and all."
 
Long story short. There are no layoffs. There are no "cuts." just penalty boxes and lack of hiring at the new firm. Good luck everyone! Notice in the conference calls they said we'll be terminated from the old firm (so we get 401k rollover and pensions, etc...), but they never said, "and you'll also be rehired."
 
I don't believe a word of it.

Greenbacks's picture
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Joined: 2004-12-21

Why would you not believe him?
 

He works in God forsaken hellhole called a wirehouse where the managers and CEOs are liars and cheats and treat there employees and clients like Sh$%#.
 
 

Conrad Dobler's picture
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Joined: 2009-01-11

Greenbacks wrote:Why would you not believe him?
 

He works in God forsaken hellhole called a wirehouse where the managers and CEOs are liars and cheats and treat there employees and clients like Sh$%#.
 
 
 
Because, your hysteria aside, he's not the only one that works there.
 
BTW, aren't you the guy that screams about how awful wireshouses are, yet you've never worked at one?

awesome's picture
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Joined: 2007-01-04

Someone PM'd me and asked if I meant everyone, or all of SB or all of MS. In context, its newbies (LOA 5 years or less) and lower producers, maybe 300k or something. None of the figures are 100% verified. Just what I've been told. In the meantime, I peruse these things to see if anyone else has data on that subject. Otherwise its heads down like it doesn't exist (with an offer from another firm in my back pocket)

Greenbacks's picture
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Joined: 2004-12-21

 Dear Con,
 
You do not have to work some where to know it is a sh&t hole.
 
All you have to do is read this forum and watch the news and talk to clients.  
 

Conrad Dobler's picture
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Joined: 2009-01-11

Greenbacks wrote: Dear Con,
 
You do not have to work some where to know it is a sh&t hole.
 
All you have to do is read this forum and watch the news and talk to clients.  
 
 
Most people would want to know firsthand about something before they popped off in such emotional tones. Then again, most people are probably far smarter than you.

Conrad Dobler's picture
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awesome wrote:Someone PM'd me and asked if I meant everyone, or all of SB or all of MS. In context, its newbies (LOA 5 years or less) and lower producers, maybe 300k or something. None of the figures are 100% verified. Just what I've been told. In the meantime, I peruse these things to see if anyone else has data on that subject. Otherwise its heads down like it doesn't exist (with an offer from another firm in my back pocket)
 
There are certainly penalty boxes, but the whole "you won't be hired by the new firm" is just someonr spouting off with nonsense.

mikem10000's picture
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Joined: 2009-08-24

Annie Gasparro has been reporting on the Dow Jones news wire Brokers World that MSSB has said they lowered the Penalty Box threshold for 2009 to $250,000 to be in line with Morgan Stanley. Does anybody know? I am being told its still $350,000.

Delmarva's picture
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Joined: 2009-03-21

mikem10000:
   I read the same article but my understanding is the penalty box is $300,000 below which the payout drops to 20%. I've spoken with my manager and the FA comp desk. My understanding is a new comp plan is in the works for 2010 and will be announced sometime in September or October. At the same time, according the the FA comp desk, some of us will see subtractions from our net to adjust our yearly payout to the current grid. My manager made a call and told me I would not experience those subtractions.
   I think the bottom line is the firm is not really sure what its doing. Good luck

mikem10000's picture
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Joined: 2009-08-24

May I ask you if you are doing below $300,000 and what your payout is? Thanks.

Delmarva's picture
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Joined: 2009-03-21

Right now I have in slightly over $210K and my payout is 30%. I know of people in my office who are below 30% and I think the reason is I broke through $350K last year and they did not.

mikem10000's picture
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Joined: 2009-08-24

Hi, If you finish the year at $295,000 do you know if your payout will be 25%? Thats what I am being told but Brokers World is reporting 2009 penalty box has been dropped to $250.000. Thanks.

Delmarva's picture
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Joined: 2009-03-21

I have no clue what will happen but my manager tells me I will not drop below 30% for 2009. His statement is based upon a call he made. My sense is no one knows what is happening. I think the firm is continuing to bleed brokers and that may be the deciding factor.
 
I believe the fa comp desk is also clueless. I've called them and they use words like "from what we're being told."
 

I've looked around and found some pretty good places to land if my payout sinks further.

mikem10000's picture
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Joined: 2009-08-24

My understanding is if I do $295,000 my payout will be almost 40% less than my Morgan Stanley counterpart for 2009. Not exactly a win win.

Delmarva's picture
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Joined: 2009-03-21

I don't think that is going to happen (you at 40% less than your morgan counterpart). In my case, I should be at 20% but the firm adjusted and I'm at 30%. My guess is the firm will adjust again. If you want to discuss more details you might want to pm me.

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