AGE Bot. By Wachovia
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Curious to see about retenion package. My trail 12 is 310k. I know UBS
offered 60% of T12 at that level stock and cash. Somehing similar would
be nice. Do anyone remember what the retention scale was fro Legg/Smith
Barney Deal ?
[quote=brokerman] Curious to see about retenion package. My trail 12
is 310k. I know UBS
offered 60% of T12 at that level stock and cash. Somehing similar would
be nice. Do anyone remember what the retention scale was fro Legg/
Smith
Barney Deal ?[/quote]
I think the past deals done by Wachovia are more relevant. The deal
offered to the Pru advisors was skinny… very skinny, and I wouldn’t think
much would change with the acquisition of AGE.
At $310k, you are barely above the cutoff number. You would have
received a 10% retention package = $6,000 per year for 5 years.
Wachovia will most likely see the advisors at AGE as dedicated to the firm.
They won’t feel required to pay-up for something they practically own. It
wouldn’t shock me to see the cutoff point for retention packages higher
than the $300k limit for the Pru deal. That would mean lots of advisors
left singing the blues being told 'if you don’t like it… '
<a href=“http://registeredrep.com/mag/
<br / target=”_blank">finance_shedding_golden_handcuffs/">Prudential Secs. deal RR Mag article
Good luck.
C
Sorry, the link doesn’t work - the article from the Pru deal is as follows:
Wachovia’s pending acquisition of Prudential Securities is a good news/
bad news story for Pru brokers.
First the good: As the closing of the transaction approaches, the most
seasoned of Pru’s brokers may be in the catbird seat. With demand for
their services sky-high, they have the leverage they need to demand
significant retention bonuses. And if these Pru vets don’t like the
retention package (see related article on page 24), they’re likely to be able
to find the compensation they seek at another firm.
The downsides to the merger involves reps who aren’t top producers.
Junior brokers are likely to find their services in lower demand, both
within the merged company and out on the street. Meanwhile, the
mobility of the more experienced brokers might be hindered by restrictive
employment contracts and loan agreements with aggressive termination
penalties. A close examination of these agreements is required in order to
determine whether the restrictions are enforceable by Wachovia.
Further, brokers leaving Pru now might find the cost of doing so costly,
due to a benefit called MasterShare.
In abbreviated terms, MasterShare is a deferred compensation plan in
which brokers authorize Pru to deduct between 5 percent and 25 percent
of their pay. The money is gathered in an account and invested quarterly
in plan assets that are discounted by 25 percent.
But because MasterShare has a three-year vesting period, brokers who
leave the company with less than three years of tenure forfeit both their
deductions and Pru’s matching funds. For this reason, the plan is known
as a “golden handcuff.” Since broker contributions continue on a rolling,
year-to-year basis, a broker who quits Prudential’s employ usually leaves
three years of unvested, deducted commissions behind.
The merger with Wachovia raises many questions about how MasterShare
will be administered. Will all of Pru brokers’ account holdings immediately
vest upon the merger’s completion? What happens if a broker decides not
to stay on with Wachovia and goes to work for a competitor — either
before or after the acquisition closes? Will current Wachovia brokers be
invited to participate in this plan?
Even before the Wachovia announcement, Prudential brokers expressed
consternation over the structure of MasterShare. To brokers, the company
seems to be holding money hostage, and some have gone to court in an
effort to recover funds they feel rightfully belong to them.
Such legal challenges have not fared particularly well. Pru, for its part,
contends that participation in MasterShare is voluntary, and that the
employee-retention feature of the plan is a benefit the company pays for
in the form of matching funds.
But there is still plenty of disagreement over these issues, and courts and
arbitrators might yet come to see brokers’ points: that MasterShare is
rooted in money earned by the broker, and that money should not be
forfeited to Pru simply because a broker decides to take a position at
another firm.
There could be light at then end of the tunnel on this issue. I have agreed
to represent a number of Prudential broker-claimants, mainly because I
am optimistic that we can establish that MasterShare violates the legal
rights of Prudential brokers. The central issue is whether Pru strong-arms
brokers into agreements that violate the most basic business principle:
What you earn belongs to you. If we can prove this, we would establish a
broad basis for brokers who decide to leave Prudential — either because
of the Wachovia transaction or independent of it — to unchain their
“golden handcuffs” and get their rightful due. Thus, Prudential brokers
who have the opportunity to leave and receive a sizable sign-on or
upfront loan, might be able to eat their cake and have it too.
If the pending litigation with Prudential is successful, they might well
recover the money and assets forfeited by them when they left Prudential,
while still being free to enjoy the fruits of a new relationship.
To Wachovia brokers who might be introduced to a MasterShare-style
plan after the merger: Those handcuffs might appear to be solid gold, but
many Pru brokers will tell you they’re just gold plated.
Wrong article…
Here’s the right one… sorry about that. Need to step-up the functionality
of the forum, IMHO.
It read as follows:
As details of retention packages emerged in the wake of the Feb. 17
announcement that Wachovia and Prudential Financial would combine
brokerage operations, Pru advisors interviewed by Registered Rep.
expressed dismay and, occasionally, outrage at the size of the deal. Reps
are being offered from 10 percent to 30 percent of trailing 12-month
production, to be paid out over a period of several years.
However, industry insiders say there’s not much likelihood that the
package will be sweetened, because of the lousy market environment.
That has left some bitter feelings among brokers. “You bring us in, and
use our numbers to look good to go public and sell the firm, and get us
to bring our assets over here, and now we’re not getting anything,” says
one broker on the West Coast who had been at Pru for two years.
What could result is a significant number of the 4,000 Prudential
producers leaving to go to other firms before the Wachovia-Prudential
deal is completed and market conditions improve. Already, UBS
PaineWebber has picked off several branch managers in both the
Northeast and Midwest, and it’s expected that brokers could follow, to
UBS or other firms. The broker exodus could begin soon — Prudential’s
deferred compensation plan, called MasterShare, vests April 10, and some
high-end producers say they’re waiting for that before jumping ship.
“The regional vice-president was answering questions for an hour, and
the roof was caving in on him from all directions,” says one Pru advisor.
“The consensus I’m getting is the same — everybody is extremely
disappointed and very upset, and PaineWebber is canvassing our office
heavily.”
Retention bonuses at the lower end, for an advisor with production of
$300,000 in trailing 12-month commissions, would receive a 10 percent
bonus, spread out over five years (which translates to $6,000 a year).
Those with less than $300,000 don’t get anything.
Clearly, Wachovia wants to keep the top producers. Producers with a $1.2
million trailing production will get a 30 percent payout, and Pru brokers
say there are rumors that the deals for these top producers may be
sweetened.
Recruiters point out that despite the retention bonus, which vests at a
rate of 20 percent annually over five years, many Pru reps don’t have
great options in this market, and getting a bonus for doing nothing isn’t
so painful. “A number of people keep saying, ‘It’s just the first offer,’ and
they’re waiting for it to be made better,” says New York-based recruiter
Mark Elzweig. “I don’t see why it would be, though.”
Other recruiters and compensation experts advise Pru brokers to be
happy with what they get, because they are unlikely to increase their
income this year anywhere. “Why would you want to take an already
extremely bad situation and make it worse?” wonders one industry
consultant. “The likelihood of one doing better this year than last year is
not good, and last year was terrible.”
Still, the Pru brokers are hoping for something better, perhaps getting the
money over fewer years. Meanwhile, the structure of the new company is
becoming clearer. The new regional management team, as laid out by the
two firms in an internal memo, is comprised largely of Prudential
managers, many of whom report to eastern division director Scott
Umstead, of Pru. The western division reports to Terry Chase, who was
from Wachovia. Of the 13 regional directors, nine come from Prudential.
Three Pru managing directors were let go, however.
[quote=Bobby Hull]
"Most of our clients are people who have their accounts at these large firms and are ready to graduate to the next level."
[/quote]
What do you mean by this???
Do you mean most of your clients are people who have their accounts at a prestigious wirehouse and are going to graduate to an Indy?????
[quote=Whomitmayconcer]
Well, let's see, I have my own brand name and I've been out for four years and I still have a major brand name that I'm "coasting" on...
Meanwhile, when I recruit new brokers to come work for me in my office, it REALLY helps that I have the big name for them to use when bringing over their book.
[/quote]
Are you a wirehouse BOM?
If the R. package to me 6 years in doing 310K (I know I am not a superstar)
is only 10% I will be very disapointed obviously. One of the coolest things
about AGE is the 401k Profit sharing plan. What is Wachovia 401k plan like ?
When do they calculate your trailing 12 to determine the retention package ?
I assume it is when the deal closes so I have 6 months to increase my
trailing 12 to try and get a bigger retention package. right ?
Bagby and Luderman on the conference call today said the Retention
package would be competitive. Makes me think we are going to get treated
better than Pru did.
[quote=BullBroker]
[quote=Bobby Hull]
"Most of our clients are people who have their accounts at these large firms and are ready to graduate to the next level."
[/quote]
What do you mean by this???
Do you mean most of your clients are people who have their accounts at a prestigious wirehouse and are going to graduate to an Indy?????
[/quote]Yes, that is what he means. I have plenty of clients who have done so, who prefer the prestige and attention gained from working with a professional working in private practice, as opposed to a sales rep for a big anonymous corporation.
So, as I asked in the other thread, how long have you spent as an independent that you know so much about that side of the business. The fact that you did not answer before leads me to believe that I already KNOW the answer.
Questions for WB Brokers:
How is the technology there?
What are your sales titles and production requirements for getting them?
[quote=BullBroker]
[quote=Bobby Hull]
"Most of our clients are people who have their accounts at these large firms and are ready to graduate to the next level."
[/quote]
What do you mean by this???
Do you mean most of your clients are people who have their accounts at a prestigious wirehouse and are going to graduate to an Indy?????
[/quote]No, it means that his clients (asuming Bobby is not a basement dwelling internet troll, and is really the annuity shark he claims to be), those clients are ready to graduate to a higher level of fee's and surrender charges.
Never think too highly of people in this business.
[quote=mikebutler222] [quote=Philo Kvetch] [quote=mikebutler222]
[quote=Philo Kvetch]And just what does this moronic jibberish mean?[/
QUOTE]
It means A.G. Edwards, RIP.
[/quote] Ah, so you speak moronic jibberish. Thank you.[/quote]
At the conversational level, nothing to brag about. I picked it up here.
Still, I’m impressed at the ease with which you picked it up.
You’ve a native talent!
I think Wachovia reps are going to hate Wachovia for hand holding the new guys in.
Wachovia brokers get cuts off the first 10k of their business. they also get capped on annuity business. they also get ticket charges. AGE has none of this baloney. AGE brokers are not staying around. Wachovia has a different feel/culture than what AGE brokers love about AGE. Payout is different. If Wachovia continues to pay AGE brokers what they were used to in their former life, They risk losing their own people.
This merger is a botched deal. I can't fathom how they think they're retaining 97% of their workforce.
[quote=anabuhabkuss]
I think Wachovia reps are going to hate Wachovia for hand holding the new guys in.
Wachovia brokers get cuts off the first 10k of their business. they also get capped on annuity business. they also get ticket charges. AGE has none of this baloney. AGE brokers are not staying around. Wachovia has a different feel/culture than what AGE brokers love about AGE. Payout is different. If Wachovia continues to pay AGE brokers what they were used to in their former life, They risk losing their own people.
This merger is a botched deal. I can't fathom how they think they're retaining 97% of their workforce.
[/quote]
What does "capped on annuity business" mean?
[quote=BullBroker]
[quote=Bobby Hull]
"Most of our clients are people who have their accounts at these large firms and are ready to graduate to the next level."
[/quote]
What do you mean by this???
Do you mean most of your clients are people who have their accounts at a prestigious wirehouse and are going to graduate to an Indy?????
[/quote]
I don't know. It's just something I say. Noone has ever asked me what I mean, but I'm sure I could think of something to say if the did.
[quote=Captain]Wrong article....
Here's the right one... sorry about that. Need to step-up the functionality
of the forum, IMHO.
It read as follows:
As details of retention packages emerged in the wake of the Feb. 17
announcement that Wachovia and Prudential Financial would combine
brokerage operations, Pru advisors interviewed by Registered Rep.
expressed dismay and, occasionally, outrage at the size of the deal. Reps
are being offered from 10 percent to 30 percent of trailing 12-month
production, to be paid out over a period of several years.
However, industry insiders say there's not much likelihood that the
package will be sweetened, because of the lousy market environment.
That has left some bitter feelings among brokers. “You bring us in, and
use our numbers to look good to go public and sell the firm, and get us
to bring our assets over here, and now we're not getting anything,” says
one broker on the West Coast who had been at Pru for two years.
What could result is a significant number of the 4,000 Prudential
producers leaving to go to other firms before the Wachovia-Prudential
deal is completed and market conditions improve. Already, UBS
PaineWebber has picked off several branch managers in both the
Northeast and Midwest, and it's expected that brokers could follow, to
UBS or other firms. The broker exodus could begin soon — Prudential's
deferred compensation plan, called MasterShare, vests April 10, and some
high-end producers say they're waiting for that before jumping ship.
“The regional vice-president was answering questions for an hour, and
the roof was caving in on him from all directions,” says one Pru advisor.
“The consensus I'm getting is the same — everybody is extremely
disappointed and very upset, and PaineWebber is canvassing our office
heavily.”
Retention bonuses at the lower end, for an advisor with production of
$300,000 in trailing 12-month commissions, would receive a 10 percent
bonus, spread out over five years (which translates to $6,000 a year).
Those with less than $300,000 don't get anything.
Clearly, Wachovia wants to keep the top producers. Producers with a $1.2
million trailing production will get a 30 percent payout, and Pru brokers
say there are rumors that the deals for these top producers may be
sweetened.
Recruiters point out that despite the retention bonus, which vests at a
rate of 20 percent annually over five years, many Pru reps don't have
great options in this market, and getting a bonus for doing nothing isn't
so painful. “A number of people keep saying, ‘It's just the first offer,’ and
they're waiting for it to be made better,” says New York-based recruiter
Mark Elzweig. “I don't see why it would be, though.”
Other recruiters and compensation experts advise Pru brokers to be
happy with what they get, because they are unlikely to increase their
income this year anywhere. “Why would you want to take an already
extremely bad situation and make it worse?” wonders one industry
consultant. “The likelihood of one doing better this year than last year is
not good, and last year was terrible.”
Still, the Pru brokers are hoping for something better, perhaps getting the
money over fewer years. Meanwhile, the structure of the new company is
becoming clearer. The new regional management team, as laid out by the
two firms in an internal memo, is comprised largely of Prudential
managers, many of whom report to eastern division director Scott
Umstead, of Pru. The western division reports to Terry Chase, who was
from Wachovia. Of the 13 regional directors, nine come from Prudential.
Three Pru managing directors were let go, however.[/quote]
Read the article at onwallstreet.com regarding the payout pool of 1 Billion available for rep retaining packages. It says that this deal will have 5 times the money over the Pru deal. So if the Pru deal was 10-30%... do the math.
[quote=Reggin]
[quote=Captain]Wrong article....
Here's the right one... sorry about that. Need to step-up the functionality
of the forum, IMHO.
.........
Read the article at onwallstreet.com regarding the payout pool of 1 Billion available for rep retaining packages. It says that this deal will have 5 times the money over the Pru deal. So if the Pru deal was 10-30%... do the math.
[/quote]
I agree...retention will be way over the Pru deal. With the competing packages being offered Wachovia can't afford to treat AGE brokers like red-headed step children compared to existing Wachovia reps they way they did Pru if they want this deal to remain 24% accretive.
AGE has a much better rep too....considering Pru were a bunch of criminals maybe it was intentional. Oops! Did I say that!?!
[quote=anabuhabkuss]
I think Wachovia reps are going to hate Wachovia for hand holding the new guys in.
Wachovia brokers get cuts off the first 10k of their business. they also get capped on annuity business. they also get ticket charges. AGE has none of this baloney. AGE brokers are not staying around. Wachovia has a different feel/culture than what AGE brokers love about AGE. Payout is different. If Wachovia continues to pay AGE brokers what they were used to in their former life, They risk losing their own people.
This merger is a botched deal. I can't fathom how they think they're retaining 97% of their workforce.
[/quote]
It has been one day since this news has been released and you are already calling it a "botched deal." Don't you think that these problems you speak of were thought of prior to spending 6.8 billion dollars. It seems to me they would have done their homework prior to creating this deal, not to mention that at the top of both of these companies are former F.A's who may have some insight on these subjects.
[quote=pratoman][quote=Whomitmayconcer]
Well, let's see, I have my own brand name and I've been out for four years and I still have a major brand name that I'm "coasting" on...
Meanwhile, when I recruit new brokers to come work for me in my office, it REALLY helps that I have the big name for them to use when bringing over their book.
[/quote]
Are you a wirehouse BOM?
[/quote]
No, and yes. I own my own office and I use Wachovia Finet as my backoffice (which is like having a wirehouse in your back pocket!). I hire brokers from other firms to come and work with me on a splitnumber basis (the percentages vary by production). They are very successful at bringing in existing and new clients by taking advantage of the Wachovia Finet name.
I laugh when I hear these indy guys crowing about getting 90% payouts. Last month I got nearly 150% payout on MY production because I get a piece of everybodies production in my office!
Boys and girls THAT is the ONLY reason to go Indy!
[quote=Bobby Hull]
I don't know. It's just something I say. Noone has ever asked me what I mean, but I'm sure I could think of something to say if the did.
[/quote]
BTW, Bobby, this was funny. Racial jokes etc... not funny.
Rely on your wit, not your repetoir. Nobody wants to be around when the chimp starts flinging poop.