500 or bust?
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Sold it to its employees. Named it Everen Securities.
Long-ago predecessor to WS.
Sublime application of retention bonus, don’t you think?
[quote=WSxAG][quote=Maynard]
The dividend has nothing to do with retention. Granted it is a dicey environment but these guys have to run a business and at some point they have to plan for that, and a key way to run a business is to keep your best employees happy, especially when your best employees have choices.
They dont say they have gone through 50-60 scenarios and come up with 0. There will be some type of retention, it just wont be that great.[/quote] Dividends have nothing to do with retention? Really? Because right now it would result in nearly $6 billion in retained capital to eliminate it. I'm sure all the shareholders would be perfectly okay with it being eliminated and then knowing that the "Bank" eliminated its dividend so while it's securities arm paid brokers retention bonuses. Brilliant PR move. The securities arm is a rounding error relative to the overall size and scope of the banking operations. If it were otherwise, far more information would have been forthcoming long before now. Bottomline its all about survival for the banks. The larger deposit base with the combined WB/WFC is the goal - not creating the galactically flawed "Supermarket" model that Citigroup abandoned last week. [/quote]Just food for thought- so far I haven't seen anything yet that actually convinces me that the 'supermarket model' was flawed. Rather it's how they implemented the model...the crap they put into the system. You could certainly have a nice supermarket without CDO's and crappy mortgage underwriting. But nobody had the guts to stand up and say "Hey this is lucrative now but it's not going to end well, and here's why...." Nope, they were all too busy fighting to get to the top of the league tables...a Wall Street version of "my dad is bigger than your dad...."
10 yr rep with 800+Trail 12 with clean U4. I have the same quandry as many of you who have posted. Should I take a good upfront deal 100%+back end possibilities or wait and hope this viscous market does not lay waste to T12 and clean u4. I really don’t case to go through the hassel of a move in this market. I will feel like such an ass if I miss the upfront and am rewarded with no retention.
agree, supermarket model is not flawed…overextension of the model is. ws isn’t into derivitives so much more attractive (imho) than investment banks.
wells keeps isg to maintain an element of the "supermarket" while spinning off the "safer" brokerage firm in ws. it's almost a no brainer and why no retention has been discussed as it's still in the "quiet period." ws brokers get loads of newco ipo and wells never spends a dime of it's own money. if they pull this off it's testament to wells being one of the best run corps in the world...So if they spinoff WS and give stock in the new co, would we be able to liquidate any of it at will??
restricted stock...why would they give any broker such freedom? retention with prevention...hate to say it, but it would be brilliant in this environment.So if they spinoff WS and give stock in the new co, would we be able to liquidate any of it at will??
bingo.
and for those who are pre-spending the cash, sorry. save the dreams.
no cash – and restricted stock and/or options.
ala Everen… cut from the same gene pool.
[quote=iceco1d][quote=HymanRoth] [quote=WSxAG][quote=Maynard]
The dividend has nothing to do with retention. Granted it is a dicey environment but these guys have to run a business and at some point they have to plan for that, and a key way to run a business is to keep your best employees happy, especially when your best employees have choices.
They dont say they have gone through 50-60 scenarios and come up with 0. There will be some type of retention, it just wont be that great.[/quote] Dividends have nothing to do with retention? Really? Because right now it would result in nearly $6 billion in retained capital to eliminate it. I'm sure all the shareholders would be perfectly okay with it being eliminated and then knowing that the "Bank" eliminated its dividend so while it's securities arm paid brokers retention bonuses. Brilliant PR move. The securities arm is a rounding error relative to the overall size and scope of the banking operations. If it were otherwise, far more information would have been forthcoming long before now. Bottomline its all about survival for the banks. The larger deposit base with the combined WB/WFC is the goal - not creating the galactically flawed "Supermarket" model that Citigroup abandoned last week. [/quote]Just food for thought- so far I haven't seen anything yet that actually convinces me that the 'supermarket model' was flawed. Rather it's how they implemented the model...the crap they put into the system. You could certainly have a nice supermarket without CDO's and crappy mortgage underwriting. But nobody had the guts to stand up and say "Hey this is lucrative now but it's not going to end well, and here's why...." Nope, they were all too busy fighting to get to the top of the league tables...a Wall Street version of "my dad is bigger than your dad...."
[/quote] Hyman, I've been thinking the same thing about the "supermarket banking model," but haven't had the ballz to post it (I spend enough time defending other positions that almost no one agrees with me on!). The problems with these "supermarket" banks don't have anything to do with being supermarkets...it's that they had monumental screw-ups in one or two areas that now threaten the whole firm (and since they are so big, that threatens the U.S. banking system, strike that - U.S. economy, as a whole).[/quote]
Exactly.
You can have a great supermarket but if you sell defective products that hurt your clients, you'll eventually end up holding a bunch of inventory that has little value.
If you also borrow too much money to run that supermarket...more than you can afford to cover the debt service when times get tough, your suppliers will no longer accept your purchase orders when you need new inventory.
Then your supermarket is in a heap of trouble, no matter how nice it looks.
[quote=go_huskies]agree, supermarket model is not flawed…overextension of the model is. ws isn’t into derivitives so much more attractive (imho) than investment banks.
wells keeps isg to maintain an element of the "supermarket" while spinning off the "safer" brokerage firm in ws. it's almost a no brainer and why no retention has been discussed as it's still in the "quiet period." ws brokers get loads of newco ipo and wells never spends a dime of it's own money. if they pull this off it's testament to wells being one of the best run corps in the world...[/quote] Just curious, does every "supermarket" stock have to go to zero to convince you this model is flawed? No derivatives? What do you think structured products are? WS did tons of derivatives, and WSllc did tons of structured products to their customers( retail derivatives). Cross selling does not work, there are no economies of scale in our business as evident by the success of the independents. Wells knows the model is flawed, that is why they stayed away from buying brokerage firms a few years ago when everybody else was paying big numbers for them. I think eventually the regulators or congress will bring back glass-steagall.[quote=mnbondguy][quote=go_huskies]agree, supermarket model is not flawed…overextension of the model is. ws isn’t into derivitives so much more attractive (imho) than investment banks.
wells keeps isg to maintain an element of the "supermarket" while spinning off the "safer" brokerage firm in ws. it's almost a no brainer and why no retention has been discussed as it's still in the "quiet period." ws brokers get loads of newco ipo and wells never spends a dime of it's own money. if they pull this off it's testament to wells being one of the best run corps in the world...[/quote] Just curious, does every "supermarket" stock have to go to zero to convince you this model is flawed? No derivatives? What do you think structured products are? WS did tons of derivatives, and WSllc did tons of structured products to their customers( retail derivatives). Cross selling does not work, there are no economies of scale in our business as evident by the success of the independents. Wells knows the model is flawed, that is why they stayed away from buying brokerage firms a few years ago when everybody else was paying big numbers for them. I think eventually the regulators or congress will bring back glass-steagall. [/quote]Amen.
I particularly like the "its great" EXCEPT bad products, too much debt, etc, thus making the entire statement one large contradiction.
May - maybe not on the Glass-Steagall. What is interesting is how no one is discussing what is best for the clients. What do they want? I think they want someone who will always act in their best interest and they are not afraid to pay for that. Some of these “supermarkets” are set up to cross-sell banking, credit cards, toasters, etc. The indy’s have to proprietary product so they carry some appeal. But they lack some services that the wire-houses (whatever that is nowadays) provide. I again suggest you consider what this business is going to look like in 2 years and beyond and rest assured it will not look like it is today. Consider just 2 moths ago! There are places that are still client focused rather than brand focused. Some will even pay you, if you are top 20-40% for your LOS, to move. I don’t understand staying at the bank with too many FA’s and less resources just to see that you “get yours”. We tell our clients to think long term. We need to do the same.
bancofamigo –
Your last two sentences sound earily like the pitch PCG and AGE FAs will receive when retention is announced in spin-stock.
For one thing - how do you know they are getting the best deal for the loan, the card, the CD, etc? The fact is you don’t and won’t because you are looking at only what your bank has to offer. The future is non-proprietary which is really what a client wants because the emphasis is on the client not cross selling goals.
Misfit, For someone like you, there are much better deals then what you cited…200-220%, 140% upfront, back end bonus’ etc … I’m an independent recruiter, work on behalf of several regional directors and more people than ever are moving. I’ve lurked here for a long time and I’m not here to find new business or advertise, so I don’t want to elaborate. Just encourage you to reach out to some companies in your area and find out what your options are. In about 3-4 weeks the deals are going to drop about 30% across the board. Blessings and Good Luck.
[quote=iceco1d][quote=mnbondguy][quote=go_huskies]agree, supermarket model is not flawed…overextension of the model is. ws isn’t into derivitives so much more attractive (imho) than investment banks.
wells keeps isg to maintain an element of the "supermarket" while spinning off the "safer" brokerage firm in ws. it's almost a no brainer and why no retention has been discussed as it's still in the "quiet period." ws brokers get loads of newco ipo and wells never spends a dime of it's own money. if they pull this off it's testament to wells being one of the best run corps in the world...[/quote] Just curious, does every "supermarket" stock have to go to zero to convince you this model is flawed? No derivatives? What do you think structured products are? WS did tons of derivatives, and WSllc did tons of structured products to their customers( retail derivatives). Cross selling does not work, there are no economies of scale in our business as evident by the success of the independents. Wells knows the model is flawed, that is why they stayed away from buying brokerage firms a few years ago when everybody else was paying big numbers for them. I think eventually the regulators or congress will bring back glass-steagall. [/quote] There we go again. Talking 1 or 2 product lines that are screwing the entire model. So eliminate those products. I'm not advocating for any particular company BUT - So you have a company that has retail mutual funds and/or ETFs, retail brokerage, hell maybe even a discount brokerage arm. An RIA. Maybe a setup like WS had with ISG, PCG, Finet..of like RayJay has now. Even the I-Bank model could be made less risky by eliminating a handful of lines of business. Then move to the commercial banking side...no cross selling my ASS! If I could over FDIC insured checking accounts and/or savings accounts to my clients, I can guarantee you easily 2/3 of my book would do their banking business with me. If I could do any lending, or at least refer to a lending arm within my company and get some type of compensation for the referral, I know damn well I could cross-sell mortgages and auto loans to my clients (why the hell wouldn't it be NATURAL for me, as a planner, to try and reduce the interest my clients pay on their loans?!). Oh wait, doesn't EDJ already have credit cards too? Hmm, I wonder if any of my clients that trust me with their 529 plans or UTMA accounts would get their student loans through my firm IF that were an option for them? You're right. Most of this is nonsense. There are CLEARLY no possibilities for cross-selling or economies of scale. The possibility for me to have my checking accounts, retirement accounts, and loans through the same institution, on the same online account, on the same statement would probably not appeal to ANYONE. Because of a bunch of brilliant investment bankers took a few unregulated products way, way too far, apparently this whole model could never work. Silly me for even thinking it could.[/quote] problem at Wb was the mortgages they bought in the golden west deal, not the products their investment bankers created. The problem with Mer was the structured product they created for themselves. The minute you refer your customer to the bank for "banking" services, you are at risk of losing that customer. The banks use their brokerage accounts as collateral for sizable loans, which makes it very difficult for that client to leave, even if you do. The amount you get paid to refer business is usually peanuts compared to what banks pay mortgage brokers or car dealers to refer business, it is not worth the risk. I have seen brokers lose sizable accounts because the client got pissed at the bank side over terms on a loan that changed, or another bank gave them better terms, and also wanted the brokerage account transferred. If you work in on of the bank channels it is a different story, you also get business referred to you. If you work in a seperate divisions, like wb's pcg, you would have to be an idiot to refer your clients in to the bank.[quote=mnbondguy][quote=iceco1d][quote=mnbondguy][quote=go_huskies]agree, supermarket model is not flawed…overextension of the model is. ws isn’t into derivitives so much more attractive (imho) than investment banks.
wells keeps isg to maintain an element of the "supermarket" while spinning off the "safer" brokerage firm in ws. it's almost a no brainer and why no retention has been discussed as it's still in the "quiet period." ws brokers get loads of newco ipo and wells never spends a dime of it's own money. if they pull this off it's testament to wells being one of the best run corps in the world...[/quote] Just curious, does every "supermarket" stock have to go to zero to convince you this model is flawed? No derivatives? What do you think structured products are? WS did tons of derivatives, and WSllc did tons of structured products to their customers( retail derivatives). Cross selling does not work, there are no economies of scale in our business as evident by the success of the independents. Wells knows the model is flawed, that is why they stayed away from buying brokerage firms a few years ago when everybody else was paying big numbers for them. I think eventually the regulators or congress will bring back glass-steagall. [/quote] There we go again. Talking 1 or 2 product lines that are screwing the entire model. So eliminate those products. I'm not advocating for any particular company BUT - So you have a company that has retail mutual funds and/or ETFs, retail brokerage, hell maybe even a discount brokerage arm. An RIA. Maybe a setup like WS had with ISG, PCG, Finet..of like RayJay has now. Even the I-Bank model could be made less risky by eliminating a handful of lines of business. Then move to the commercial banking side...no cross selling my ASS! If I could over FDIC insured checking accounts and/or savings accounts to my clients, I can guarantee you easily 2/3 of my book would do their banking business with me. If I could do any lending, or at least refer to a lending arm within my company and get some type of compensation for the referral, I know damn well I could cross-sell mortgages and auto loans to my clients (why the hell wouldn't it be NATURAL for me, as a planner, to try and reduce the interest my clients pay on their loans?!). Oh wait, doesn't EDJ already have credit cards too? Hmm, I wonder if any of my clients that trust me with their 529 plans or UTMA accounts would get their student loans through my firm IF that were an option for them? You're right. Most of this is nonsense. There are CLEARLY no possibilities for cross-selling or economies of scale. The possibility for me to have my checking accounts, retirement accounts, and loans through the same institution, on the same online account, on the same statement would probably not appeal to ANYONE. Because of a bunch of brilliant investment bankers took a few unregulated products way, way too far, apparently this whole model could never work. Silly me for even thinking it could.[/quote] problem at Wb was the mortgages they bought in the golden west deal, not the products their investment bankers created. The problem with Mer was the structured product they created for themselves. The minute you refer your customer to the bank for "banking" services, you are at risk of losing that customer. The banks use their brokerage accounts as collateral for sizable loans, which makes it very difficult for that client to leave, even if you do. The amount you get paid to refer business is usually peanuts compared to what banks pay mortgage brokers or car dealers to refer business, it is not worth the risk. I have seen brokers lose sizable accounts because the client got pissed at the bank side over terms on a loan that changed, or another bank gave them better terms, and also wanted the brokerage account transferred. If you work in on of the bank channels it is a different story, you also get business referred to you. If you work in a seperate divisions, like wb's pcg, you would have to be an idiot to refer your clients in to the bank.[/quote] Boy is that the TRUTH. I was fortunate not to do bank business. I have 1 client that has a collateral pledge account. The bank is terrible about leaching. They WILL go after your clients accounts with you and claim that the client requested the banks intervention. Ive seen it with other producers in my office. You have no control over what the bank does once they have a loan with your client and if things go south with the bank you WILL lose the relationship. This is the same reason that attorneys and CPA's are VERY careful with refferals because if the "broker" blows up the client the client blames them.