Roll Call- Who's Walking from MER

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Phan2om's picture
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Joined: 2008-10-25

The size of the deal isn't that important to me, but the language in the employment contract scares the hell outta me- an employment lawyer thinks I am crazy to sign it.  Thoughts?

FVDA_Trade-PMR's picture
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Joined: 2008-09-24

I'd visit another employment law attorney for a second opinion and if he/she has the same sentiment, I'd suggest you DON'T SIGN IT and seek another alternative for your own future.  You do have options, many actually and just be prudent and don't "rush" into judgement would be my best advice.

Morphius's picture
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Joined: 2007-07-21

What specifically is the language that is at issue?

bondo's picture
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Joined: 2007-04-15

Any official departures yet?

Bullroar's picture
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Joined: 2008-10-28

It SHOULD scare you.   The language of the letter says that - - - yes - - - you get a retention packaged that vests over several years - - - then it says that if you are fired - for any reason - including without cause (eg. they don't like the color of your wingtips) you forfeit any unvested portion of your package - - - and by the way - - - by signing the letter - - you also give up any FACAAP/wealthbuilder/growth award you would get if you were fired without cause due to a change in control.    Example - BofA gives you a 250,000 transition payable over three years.   You have $250,000 unvested FACAAP.   You sign the transition letter,  the next day they can RIF you and you lose the $250k transition AND you lose your $250k FACAAP.   Too bad, so sad.  
It is in BofA's interests to fire as many advisors as it can - because they save transition / FACAAP dollars with every firing.  My guess is that they will look at every producer who's PCs are less than $400 - $500k that TOOK the package and fire them - and give their accounts to all the advisors that refused to sign the transition letter.   I've had TWO employement lawyers look at this - They say that the non-compete is full of holes (as all non-competes are) but losing your transition amount or FACAAP is bullet proof.    The transition pkg gives BAC an unlimited put on your FACAAP - forever.   They will just fire every producer with a large FACAAP.
 
BofA's lawyers have to be rolling on the floor laughing as they see the rubes at ML lining up to sign their Transition Awards - like sheep being led to ...........
 
The biggest mystery to me is top ML management.   How are they going to manage 16,000 workforce once they find out they were brutally sold down the river by their senior managers.
 
 

bondo's picture
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Joined: 2007-04-15

Bullroar wrote:
 
The biggest mystery to me is top ML management.   How are they going to manage 16,000 workforce once they find out they were brutally sold down the river by their senior managers.
 
 
 
Might be easier if there are only 12,000 to manage.

burtonfinancial1's picture
Joined: 2008-09-30

20% of the FA headcount will be gone by 12/31. That's my guess.. I'm probably being conservative.  At least 60% in my office are "engaged" elsewhere. My guess is half will settle down, put their panties back on and drink the BofA Koolaid. That leaves a small group who will stay, not because they're happy but because they lack the guts to make the jump or think they deserve 250% cash and fail to realize the stupid days are ending from a recruting standpoint. They'll go shopping in 09' when they get 100% offers at best and realize the opportunity passed them by.  

entrylevelFA's picture
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Joined: 2006-06-05

I will man up...I left MER.

Broker Fee's picture
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Joined: 2004-11-30

Where did you land entry?

Indyone's picture
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Joined: 2005-05-31

Based on what I've read above, no way would I sign that one-sided piece of crap.  Sounds like a typical bank-job to me.

Phan2om's picture
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Joined: 2008-10-25

Glad to see I'm not alone worried about this language.  Even the biggest, long time FAs are busy vetting offers from recruiters.  Everyone in our office is pursuing deals, and some are forming alliances or "teams" trying to bump their recruiting packages. It's like " Survivor: ML"

The really amazing thing is how this has destroyed the last of the ML culture.  Even the long LOS guys are saying it's all about the money now.  I think Mccann and those guys think there is still a "ML Culture" of loyalty and pride.   They are out of touch.
 
This was a great opportunity for MER Mgt to regain the culture of performance that I think ML has always represented.  Unfortunately they blew it. 
 
How hard would it have been to roll out a simple, competitive retention package? (like what Jamie Dimon gave Bear Stearns, for example). They could have always adjusted the new compensation plan to shave costs or focus on higher productivity FAs.  If the FAs didnt like the new compensation package, the would leave forfeiting their "retention." No harm, no foul.  But they would not have put the whole sales force in play.

B24's picture
B24
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Joined: 2008-07-08

Personally, I think it's sad. Merrill represented something on Wall Street. I think they were the most prestigious firm that served regular people (not many of our neighbors have Goldman, Lehman or Bear brokers). By losing Merrill, I think our industry has lost something. Hopefully, BAC sells them off again somewhere down the road. But it may be too late then...

bondo's picture
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Joined: 2007-04-15

The next three Fridays sure will be interesting.  I'm also curious as to where most of the guys go, assuming they do leave.  Indy or another brokerage?

B24's picture
B24
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Joined: 2008-07-08

You really think any big producers will have their deals in place by the next few weeks? I guess if they just walk to another BD (who???), but if they go indy, the process is probably a bit more involved. No?

Morphius's picture
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Joined: 2007-07-21

Don't think the movement will be immediately apparent, bondo.  Those with sense will plan their move properly, which generally takes a while.  But most who are planning on leaving have likely begun to put the wheels in motion, to various degrees.It will come, just not on the time frame you suggest.

bondo's picture
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Joined: 2007-04-15

What's your impression of guys who don't sign the retention package by the 14th and are still at work come the 17th?

saveteran's picture
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Joined: 2008-10-24

Many of us are wondering what happens if we choose not to sign the document and stay at ML? I'm in a very high profile, longstanding ML office and most people are talking openly about who they're meeting with, etc. I know a lot of great 1st and 2nd quintile FAs doing less than $1 million who will be leaving. It's sad to see the culture destroyed so quickly. When it comes down to it, guys like McCann and Sontag may put up a front that they care but at the end of the day, they can retire tomorrow very rich men.

Morphius's picture
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Joined: 2007-07-21

I have not seen the ML document so I cannot comment on it specifically.  However, no one  can be coerced into signing effectively a new employment agreement, and to sign anything simply because you think you have no alternative would certainly be unwise.  My experience with AGE/WB was they offered enhanced terms (upfront loan) if you signed the document; those who didn't by default were paid retention on an annual cash basis.If they haven't clearly spelled out your alternatives should you wish not to sign, you should immediately hire an attorney who can advise you specifically.  This is no time to be penny wise and pound foolish.  Good luck.

bondo's picture
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Joined: 2007-04-15

Any movement this week?  Nothing around my place.

saveteran's picture
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Joined: 2008-10-24

No movement in our office but many excellent FAs are speaking openly about their plans to leave. ML will not be the same as the best and brightest walk out the door. It's a shame.

Phan2om's picture
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Joined: 2008-10-25

No movement this Friday, but many of the guys in our office are feverishly meeting with the competition- one guy had dinner, breakfast, and lunch meetings the last couple of days....he says he is a free agent and will make his decision this upcoming week, and be gone by the 14th.  I am in a pretty good sized office and everyone seems to be highly engaged with the competition.....I have to admit I don't feel any loyalty anymore- really sad.

bondo's picture
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Joined: 2007-04-15

I will say the people who are the most active about their options in my office are the biggest producers.  The small and medium sized guys seem content to stick around and take their chances.  The odd thing is the medium size guys have been in the business longer than half of the big producers.  I think they are content to slowly increase their business, while the big guys are not satisified with being average or close to it.

B24's picture
B24
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Joined: 2008-07-08

For the long-term, mid-level producers, it makes sense. They probably don't do much heavy lifting anymore, so why not just take some cash to sit and do the same thing, and not worry about moving your book?

fritz's picture
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Joined: 2006-01-12

saveteran wrote:No movement in our office but many excellent FAs are speaking openly about their plans to leave. ML will not be the same as the best and brightest walk out the door. It's a shame.
 
"best and brightest"  Just curious, been in the biz awhile and wondering what that means?  SAT Score, Series 7 Score, IQ, married the richest wife..help me out.. please do not tell me it is determined by AUM or t-12..because what I have seen 99% of time these are among the lower educated group in regards to market knowledge.

Gordon Gekko's picture
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Joined: 2007-07-08

It would be good to see the big producing ML guys get some entrepreneurial spirit, not take it up the pie hole from Ken Lewis, and cut their own deals.  The quote by the billion dollar team that they could have gotten twice as much as Ray Jay gave was impressive I thought.

xbanker's picture
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Joined: 2007-01-21

Gekko, can you elaborate on that situation? What happened specifically with the team in question?

bondo's picture
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Joined: 2007-04-15

xbanker wrote:Gekko, can you elaborate on that situation? What happened specifically with the team in question?
 
http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20081023/FREE/810229973/1028/BROKERDEALERS
 

“We are not going because of the paycheck,’’ Mr. Nemes said, noting that they received “less than half of what we could have gotten somewhere else.”

Gordon Gekko's picture
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Joined: 2007-07-08

I was only off by $500 million in terms of AUM but their quote (listed above) was spot on.

xbanker's picture
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Joined: 2007-01-21

That's a great story. I'm an ex BofA employee from another department and can tell this is just not going to work in any way. It will either become a huge disaster or eventually lead to a situation similar to Schwab in which the firm is eventually spun off.

Gordon Gekko's picture
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Joined: 2007-07-08

BAI was trying to recruit me a while back and everything they promised in terms of leveraging the "size and scope" didn't come to fruition, at least for a co-worker who went there and has since left to go indy. 

Phan2om's picture
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Joined: 2008-10-25

It will be interesting to see how this plays out- is this all a lot of talk or will people really leave.  One things for sure, McCann & Sontag have clearly demonstrated their loyalty is to Ken Lewis and not the FAs.  Screw them.

GlengarryGlenRoss's picture
Joined: 2008-10-27

http://www.cnbc.com/id/27514835Article says 20-30% Merrill brokers may walk...

Morphius's picture
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Joined: 2007-07-21

Phan2om wrote:It will be interesting to see how this plays out- is this all a lot of talk or will people really leave.   

There is always more smoke than fire, but there will be some fire.  I would estimate only a very small percentage the people you hear threatening will actually leave.  Leaving is scary and there are countless excuses one can always find NOT to.  The vast majority will continue to travel this well worn path of least resistance. It's just human nature.
 
If you doubt it, just go back and read some old posts here from others who went through mergers or take overs in past years.  You'll notice that very few of those threatenting to leave actually left.  This will be no different.  "It is a tale told by an idiot, full of sound and fury, signifying nothing."
 
Or for those who prefer more contemporary material, Yoda said it pretty well:  "Do, or do not.  There is no try."

B24's picture
B24
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Joined: 2008-07-08

My guess is that the FA's that are really goal-oriented and want to grow their practices will seriously consider leaving (either to go indy or another firm).
Those that are near retirement or are just content will probably take their check and stay put.
For a lot of them, it might be tough to find "greener grass" anywhere else.  These days, there aer few firms that have been left untainted (or better yet, it proves that you never know what might happen to any firm).

WealthManager's picture
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Joined: 2006-05-16

There has been a lot of talk in my office and also the other offices in my complex.  What I find to be amazing is how candid every FA seems to have been about the offers they are receiving.  While no one has said that they are leaving, they have certainly checked out what else is out there.<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
 
What I’ve been hearing is that the problem isn’t just the money; it’s the contract that they have to sign.  Most everyone expects that BoA will slowly reduce payout but the bigger problem would be if BoA took Merrill out of the protocol network.  The way that the contract is worded, the departing advisor would not be able to contact any of their clients once ML is removed from the protocol network.  Wouldn’t the same problem exist if a ML advisor went to LPL or some other non-protocol place?
 
--WM

Morphius's picture
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Joined: 2007-07-21

WealthManager wrote:
What I’ve been hearing is that the problem isn’t just the money; it’s the contract that they have to sign.  Most everyone expects that BoA will slowly reduce payout but the bigger problem would be if BoA took Merrill out of the protocol network.  The way that the contract is worded, the departing advisor would not be able to contact any of their clients once ML is removed from the protocol network.  Wouldn’t the same problem exist if a ML advisor went to LPL or some other non-protocol place?
I'm not an attorney, so take this with a grain of salt, but I did go through this process using the Protocol (with legal counsel guiding me) this year so I have a layman's knowledge.
 
First, if either of the firms involved are not signatories to the Protocol, then the terms of the agreement are not binding.  Instead, the 'old' rules (or lack thereof) apply, with the result often being the departing broker is prohibited from taking client info but ignores this and does it anyway, and is then sometimes the target of TROs or other legal maneuvers by the old B/D.  This then generally leads to some negotiated financial settlement paid to the old B/D to 'compensate' them for the loss of 'their' client. 
 
Those who have been in the industry for a while are very familiar with this crazy approach.  That is what you should expect if even one firm is not a Protocol signatory, whether that firm is ML or LPL or anyone.  Even if the new b/d is a signatory but yours is not, the terms of the agreement do not apply.
 
I would assume it is a separate and distinct issue legally if - quite aside from this Protocol issue - you choose to sign a new contract that imposes broader restrictions on your ability to move and take clients with you.  Presumably if you get some value in exchange for agreeing to this new restriction - such as a retention bonus - this would be viewed as you freely entering into a contract in exchange for the new benefits they offered. 
 
Bottom line is you should make sure before signing any new contract that you clearly understand the legal implications.  Ignorance of what you were signing is no defence, assuming you are of sound mind and under no duress.
 
 

shredder's picture
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Joined: 2007-06-04

does anyone "know" what happens if someone desides NOT to sign the agreement?

conage's picture
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Joined: 2007-06-15

shredder wrote:
does anyone "know" what happens if someone desides NOT to sign the agreement?
 
I don't "know", but I can "guess" it would be an uncomfortable situation.

Morphius's picture
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Joined: 2007-07-21

conage wrote:shredder wrote:
does anyone "know" what happens if someone desides NOT to sign the agreement?
 
I don't "know", but I can "guess" it would be an uncomfortable situation.Shredder hits the nail on the head.The answer to this question is too important for anyone directly involved to be content with a guess, or worrying about making someone uncomfortable.  You have every right to insist on clear facts, including what happens if you don't choose to sign an entirely new and more restrictive employment agreement.  Do you think management expects no one will ask this obvious question?  Do you think you have no choice but to sign whatever is put in front of you?  Come on, guys - reach down and check to see if you can find anything hanging down south!  If not, grow a pair!

bondo's picture
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Joined: 2007-04-15

At least one guy in my office who was spitting nails when the package came out now sounds as if he is not going anywhere.  It would surprise me if he leaves although his departure would be understandable, as would it be for another quarter of the office.
 
It will be very interesting to see how many guys are willing to cut the cord and either head to another firm or go indy.  One big team in our office has been upset with management for quite some time.  I think this will be the final nail in the coffin and will send them out the door.

BACFA's picture
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Joined: 2006-03-26

Some friends of mine from the Quick & Reilly merger refused or stalled in signing a new non-compete (tied in with a pretty bad retention bonus) with B of A.  They were never explicitly threatened but they were harrassed endlessly (phone calls, visit by management).  End result was that they signed.  No one that I knew actually pushed it to the point of getting fired or left alone.

josephus's picture
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Joined: 2005-06-23

So, if BAC signs the protocol or MER states that it still appliers to MER brokers how much does that change the landscape? If you are a MER rep, does it change your feelings about whether to stay or go?In other words, what is the protocol worth to you as a rep?

bondo's picture
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Joined: 2007-04-15

josephus wrote:So, if BAC signs the protocol or MER states that it still appliers to MER brokers how much does that change the landscape? If you are a MER rep, does it change your feelings about whether to stay or go?In other words, what is the protocol worth to you as a rep?
 
My thought, and I am just a rookie, is this is more about BAC and MER telling the MER advisors we will be left alone.  Everything management said once the merger was announced was we will keep the name, the brand, our management will stay in place, and we will be allowed to do what we do best.  It seems this is already not holding true and I don't know anyone who really thought it would. 
 
To me this is more about the business is changing, MER is never going to be like it was, and do you want to be with an organization where the expectations are unknown and possibly beyond your control or do you want to go elsewhere where there is a better sense of what your future holds.

WealthManager's picture
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Joined: 2006-05-16

So far no one has left from my branch or complex.  I originally thought that today would be the exit day for some.  Now that BoA in joining protocol I don’t think that there will be that large of an exodus today.  Any exits from other branches yet?<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
 
--WM

burtonfinancial1's picture
Joined: 2008-09-30

Update: It's Friday and we just saw our first departure. 2 man team, took their admin as well. $1.3M t-12.  I hear they got 140% up, 100+ back end.  Who's next?? 

wheightsd's picture
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Joined: 2007-08-28

Are any of you from NYC branches?

WealthManager's picture
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WealthManager wrote:
Any exits from other branches yet?<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
 
 
We actually gained a team today. 

burtonfinancial1's picture
Joined: 2008-09-30

Just confirmed a rumor I heard earlier today.  Oakland CA- largest team in the office left today.  I don't know details about where they went, but it's shocked folks. I heard from a guy in another Bay Area office, and I'm nowhere near there. He's telling me he hears everyone he knows in his office is in negotiations.

bullinachinashop's picture
Joined: 2008-07-18

The biggest team in our branch left yesterday for UBS. Total of 4 members. One member with 20+ LOS.

burtonfinancial1's picture
Joined: 2008-09-30

UBS has been very aggressive lately! 

Greenbacks's picture
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Joined: 2004-12-21

UBS could go under they are no different then any other poorly run crap house!  
 
What is wrong with people if you leave go indy and move your book  once!  

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