Time was when being a bank broker could get you called a “lobby loser.” Real brokers worked at wirehouses and regional broker/dealers. But recruiters say that image is changing. “The old perception that those working for a bank are class-B brokers is wrong,” says Mindy Diamond, president of Mendham, N.J.-based recruiter Diamond Associates.
And, conveniently, it's changing at a time when banks are hiring more brokers than ever to build assets. “We should have a bigger share of the customers' wallet than we do today,” says Dan Deegan, national sales manager of Bank One Securities. “We're giving up too much to the wirehouses. We want to go after it.”
Bank One, Bank of America, Wachovia, Wells Fargo and Key Bank are heavily recruiting brokers. Several execs say they pay comparable packages (payout on production) to traditional broker/dealers; bankers generally make a salary, plus a bonus.
Brokers with annual production in the $150,000 to $300,000 range are benefiting most from this trend. These are also the type of brokers having the most trouble hanging onto jobs at traditional brokerages. Many are two- to five-year veterans who haven't been able to grow their business enough to weather hard times.
“We're seeing a lot of guys come over from the wirehouse,” says one Wachovia broker, who works in a bank branch. “It's simple. We've got a captive audience.”
With brass at firms such as Salomon Smith Barney, UBS PaineWebber and Morgan Stanley concentrating on producers with production of at least $300,000, a void has been created — one the banks are happy to fill. “There's always a market for guys with a $100,000 to $200,000 book,” says Houston-based recruiter Rick Peterson. “Banks will gobble them up all day long.”
Bank of America has said that it intends to hire 3,000 brokers. It currently has 760. Meanwhile, Bank One Securities has added more than 100 brokers this year, increasing its number to 800; about half the new hires have come from wirehouses. Wells Fargo has hired more than 100 brokers in 2002, bringing the total to 1,200. It plans on adding another 200 this year, although Greg Bronstein, managing director of brokerage services at the company, feels the company could comfortably sustain 6,000 brokers.
For the big five wirehouses and their 50,000 advisors — especially the stars — a few thousand people migrating to the banks may not be much of a threat. Over time, though, it could alter the landscape of the profession.
Fun Fact
Found on the Internet
Advice from a financial planner:
If you bought $1,000 of Nortel stock one year ago, it would be worth $49. The same investments in Enron and WorldCom would leave you with $16.50 and less than $5, respectively. If, however, you bought $1,000 worth of Budweiser (the beer, not the stock) a year ago, drank it all, then turned in the cans for the 10-cent deposit, you would have earned $214.
Based on the above, my current investment advice is to drink heavily and recycle, says the advisor.
