[quote=mikebutler222][quote=Lex123]

You clearly don't have much experience in business. In other occupations, salespeople are always getting there territory realigned,  their commissions cut, or their "quota" increased to make the same amount. In most sales jobs you have to keep selling! We develop a book and then expect to play golf for the rest of our lives.

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That's an interesting take. We see that happen to wholesalers all the time and never consider it happening to us.

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[quote=joedabrkr] [quote=mikebutler222][quote=Lex123]

You clearly don't have much experience in business. In other occupations, salespeople are always getting there territory realigned,  their commissions cut, or their "quota" increased to make the same amount. In most sales jobs you have to keep selling! We develop a book and then expect to play golf for the rest of our lives.

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That's an interesting take. We see that happen to wholesalers all the time and never consider it happening to us.

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All true, but it's much easier for a wholesaler to change companies if they feel they're getting a raw deal, IMHO.
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Is it really?

[quote=Registered Rep]My guess is when bonuses are paid out early next year, you'll see mass exodus @ SB.[/quote]
I highly doubt it.  Only the lowest producers after five years should feel any pinch whatsoever.

[quote=opie]Little or no net impact.  Vritually a non-story.[/quote]

'

Are you building a book from scratch?  did they help you with assets or are you in a partnership?

El scratchola. 

It just seems to me that you are either going to make it in this business or not.  During the first five years, this rule doesn't apply.  After five years, if $5k is going to make or break you, it you are not going to make it anyway.  And anyway, by then, you would be making most of this back with assistant pay and registrations.

D,

(You don't mind if I call you by your first name do you?)

That's an awful cavalere attitude you have towards other people's money. It's not costing YOU anything so what are these old dinosaurs bitchin about? Right?

What they are bitchin about is how that firm has consistantly screwed up and they consistantly take the money to pay for the screwup out of the pocket of the broker.

We had to take a cut in pay when Peter Cohen bought EF Hutton without looking at the books first, and then finding out that it was a black hole that cost us more AFTER we bought it than it did when we bought it. We were the ones that took the hit due to the LP scandals, not to mention the clients we lost and the money we lost on deals that Shearson said were rock solid! We were the one's who took the blame for everything wrong that the firm insisted we buy  when these investments turned out to be loxes, it was the broker's fault for buying them. We were the one's taking the hit from clients (whether we ever bought a telecom stock or not) who wondered if our ideas were our ideas or if we were just unloading Jack Grubman's buddies shares. We were the ones who built our business on the Uncommon Values UIT only to have it tank year after year after year, and then the firm cut the payout TO US, but not to them, the managers made the same money.

Those Dinosaurs in your office don't specifically care about the $12,000 per year (don't forget, they're working off a 40% grid, so that first $5,000 is costing them 20 percentage points or a grand per). But the fatigue factor is setting in! The firm lost another lawsuit, and so the broker is going to have to pay, while management bellies up to the trough to dip their snouts into the bonus slop fund as often as they can.

The brokers are being ignominiously Bslapped!

Mr. A

1) You're not funny.  Save it.
2) The overtime lawsuit was an industry problem, not solely an SB problem.  Other firms may respond similarly.
3) No one in the entire firm nets out a loss from this greater than $5k a year, due to the other changes announced including firm paid sales assistants, registrations, etc.  See the Reg Rep article for an example.
4) If you have been disgrunted since the EF Hutton era, why are you still there?

The reason that there is so much hostility over this issue is because Citi's management has done an absolutely dreadful job running the Smith Barney division - in  fact, they've done a dreadful job running about everything but the Private Bank and Citi Cards. This shows in their horrible stock price over the last five years. Salomon Smith Barney was the model that the industry followed all the way up to 2001 and Citi effectively screwed it up through "phantom cost cutting" in the form of increased compliance after the Grubman thing. 

Smith Barney has been among the hardest hit firms over the last two years by the recruiters b/c the vast majority of brokers are unhappy there. This is because Citi has continued to cut resources and increase compliance. The senior management at Citi is committed to keeping a certain profitability of the company and has lacked the abilty to do it by increasing revenue, so they have simply cut and cut some more.

Smith Barney brokers have watched as ML has surpassed them on every level and gotten increasingly frustrated. SB has been unwilling to make investments in technology, people or staff at a time when those things have been all the more important and after 5 years, the strain is starting to show. (S)SB used to lead in flexibility of business, technology and product - it now trails almost every other wirehouse firm in those respects.

I agree with others that this isn't really a big deal to anyone who shouldn't be considering whether they would do better at a bank, but I also think that there is some reason to suspect that this will be the "straw that broke the camel's back" for many producers, who will probably look to move to UBS or MS - two firms that are committed to making the investments necessary to grow their private client franchise and serve the needs of the new wealthy and who aren't run by a lawyer who did little more than serve Sandy Weill's narrow interests between 1979 and 2002.

The Citi platform (truly global presence, strongest lending capabilities, huge economies of scale on technology) gives SB the potential to be the leading firm among major wirehouses, but the pure incompetence of the senior management at Citi has resulted in the exact opposite effect.

Notice how the stock price jumped up when the rumor was floated that Prince and Krawchek were out? Notice how it dropped when people saw that they were staying?

Its frustrating for management at Smith Barney too–as the messengers delivering bad news all the time. Payouts going down, compliance becoming more strict. There is a tremendous pressure to increase fee based business at all cost, whether or not the performance is there. Although the issue of assistant comp is specific to Smith Barney now, it will probably go industry wide and I can understand why managers are telling their advisors its not just Smith Barney (even if it is stretching the truth a bit). I agree with one of the other posts here; brokers make a lot for what they do. At least in my branch, if the brokers spent more time with clients and less time complaining, they wouldn’t care so much about the necessary adjustments (which really are revenue neutral for the brokers that do any business).

Mike,

Which Boston office you in?

I must be missing something. Since when do the reps “pay” their SA’s? Token $200 a month or 1% if registered but NEVER full pay. Who is??

You know what Opie? You are right.

I have no business discouraging you. You need to slurp down the kool-ade and believe with all your eyes screwed shut heart.

I know the deal with Smith Barney. I was there. I liked it there! It's a fantastic place to be from.

You just keep on smiling and dialing, and I wish you the best with your career.

Go get'em killer!

Mr. A

Oh, and stay off boards like this, aside from the fact that they can fire you for it, you have work to do!

Whalehunter,

It has been the "official" policy of the firm that all SA comp from FAs is "Voluntary" and BOMs "would not tolerate" bidding for the good SAs.

But come every year end the manager comes into the office and sits down and gives you a friendly smile as he suggests that it's better for her if you could help her out with some monthly cash. "cause NY is only giving out 2% raises this year, and these girls can work at any house in town!

Helps the BOM keep office expenses down, and after all we're a team!

At least that's how it was when I was there.

Mr. A 

Glad I am indy!

Don't you guys expect to get screwed by your employer after all it is a wire house? They have you scew the clients and then they screw you

Go indy and get over it

[quote=mranonymous2u]

I know the deal with Smith Barney. I was there. I liked it there! It’s a fantastic place to be from.

Oh, and stay off boards like this

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yahh that kinda sums it al up......

mikebutler why are you on every firms website are you a headhunter?or in managment trying to recruit and exploit?

[quote=san fran broker]

The reason that there is so much hostility over this issue is because Citi's management has done an absolutely dreadful job running the Smith Barney division. yes this is true, and Mr A is right on too with many of his comments. For SB to attempt to punnish their RR'sfor a lost court case is beyond stupid. That would be a little akin to raising commision rates against a client who had beaten them in court. In fact aren't bkrs sort of the ultimate clients? They should be, but it's doubtfull if upper mgmt often thinks this way, even though they do occasionally talk the talk. SB seems to be slapping their bkrs in a make my day challenge. Many need to walk or it will be bad for the whole street. Lower payouts is not a good thing. Right?

Read the Reg Rep article.  There is little net change whatsoever.

Yeah, that article is certainly conclusive.

http://registeredrep.com/news/sb-pay-cut

I like this line "In the end, some reps might actually get a boost in net pay. In fact, one broker said he thought some 7 percent of the reps in his office would get a bump in their annual paycheck."  A whole 7%? Wowie, zowie, kapowie! So much more than 5% and yet semi close to 10%!

"Because the average Smith Barney rep’s payout hovers around 40 percent, this means that the average annual pay cut per rep is $12,000." Uh huh! And yet somehow nobody is going to lose more than $5,000... Interesting.

The average by Quintile MAY be at a 40% payout but the average payout CAN NOT be 40% in that there would need be someone making more than 40% to offset it. Since there isn't...well we all know that numbers can be misleading.

I'm also interested in the "We'll pay for errors." claim. Up to what?  I've seen people with errors of $20,000 in a single trade. In a 1987 type correction there could be hundreds of millions of dollars in errors, SB is going to cover them all? (NBL)

Secondly, if you are doing all managed money, how many errors do you have in a typical year? Will the net result of this make the enviroment less friendly for Stock Brokers?

Mr. A

"in that there would need be someone making more than 40% to offset it.

In that for every FC on the penalty grid of 25%(?) there would need to be a broker making 55% to offset him.

Yes, I know that there is a (may be) an average payout of around 40% (less than) on dollars of commission. But that just goes towards showing how the middle class of brokers are doing the vast majority of the heavy lifting in the industry.

Mr. A