Retention....please do not hijack
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while retention may not be at the front of the agenda for WFc management, I do think they will address it, and I do not think that the market fluctuation will have any real impact on what the outcome is. Due to the fact that any upfront money will be a forgivable bonus, they can tweak the accounting so that it is a hit over a couple of years, not to mention that I think this “stay” bonus will have more deferred comp in it than anything else.
Meredith Whitney, an analyst at Oppenheimer, has been spot on in regards to the financial fiasco we are in now. Her #1 sell (as in dump) idea - Wells Fargo, due to the Wachovia merger. I will be shocked if the Wells retention is much better than BAC/MER’s.
maybe she needs to read some of the posts on here saying that there has be some retention or over a billion dollars of brokerage revenue will walk?? With all that revenue the brokerage unit alone will propel WFC to all time highs Who even cares about all the bad loans they picked up??Meredith Whitney, an analyst at Oppenheimer, has been spot on in regards to the financial fiasco we are in now. Her #1 sell (as in dump) idea - Wells Fargo, due to the Wachovia merger. I will be shocked if the Wells retention is much better than BAC/MER’s.
I assume with your smiley faces that you are being facetious.
I don't recall Meredith Whitney mentioning the WS acquisition as a bright spot for WFC. I do recall her saying the banks haven't seen their lows and they need to raise more capital. I don't know what this ends up meaning for a WS retention package.meredith is the same bitch that said wfc was a great buy at $20/share and now a sell a week later?
If you bought at 20 and sold today you made money. She has been at the forefront of calling this mess, much to the chagrin of bank bulls.
[quote=Gordon Gekko]I assume with your smiley faces that you are being facetious.
I don't recall Meredith Whitney mentioning the WS acquisition as a bright spot for WFC. I do recall her saying the banks haven't seen their lows and they need to raise more capital. I don't know what this ends up meaning for a WS retention package. [/quote] Yes being sarcastic...think most analysts worse than worthless but she has been calling the shot pretty good. Do agree from the way the bank stocks are acting that the bad news is nowhere near out on them. Audited financials coming (for year end) and it will force these banks to fess up before the audits get done, could be real ugly.Gotcha! I’ve been trained somehow to think long-only and anyone that comes up with a bear case is a fool. I think the stock market is a better predictor of future earnings (versus most analysts, like the Wachovia one who cautioned us about the volatility in GE a week or so ago - thanks for the head’s up!) and the market is saying they will suck until further notice.
Whitney has been dead on. She panned all the banks today. She said Citi has the worst ahead of it, (can you freakin imagine?) and every bank in her universe will need a capital injection before this is over.
She may end up being a one hit wonder like Granville, or Prechter, but right now she moves markets. I think a lot of todays damage was a result of her comments.
Yet again, this thread is being hijacked…
The silence is deafening. I will say this though.... what happens with retention will be the single clearest signal with what Wells thinks of its brokerage. It will make a crystal clear distinction in how and if there is going to be a major shift in the culture at WS. WS has always been very good to its brokers when it came to mergers. WS is, like everyone else, paying big money for newly aquired brokers. If they offer a retention package similar to the MER deal, then they are clearly showing that they really do not care what you do in terms of staying or leaving.[quote=BukiRob]Yet again, this thread is being hijacked…
The silence is deafening. I will say this though.... what happens with retention will be the single clearest signal with what Wells thinks of its brokerage. It will make a crystal clear distinction in how and if there is going to be a major shift in the culture at WS. WS has always been very good to its brokers when it came to mergers. WS is, like everyone else, paying big money for newly aquired brokers. If they offer a retention package similar to the MER deal, then they are clearly showing that they really do not care what you do in terms of staying or leaving.[/quote] It is a bit surprising that there isn't much news with resepect to the securties side.At this point, every day that goes by just reduces the chance of any retention. I hate to say it, but dont be surprised if its minimal and it is all deferred comp. T-12’s are dropping by the day. Wonder what time frame they will use to measure if they even have a bonus. The strategy here is clear. Keep the FA in line and string em out as long as possible. The more time that passes the less likely guys will take deals or even be able to get one. The window of opp for deals has a limited shelf life and exp date will be coming up within the 1st qtr. Then only the very very best will be able to command anything.
At this point, every day that goes by just reduces the chance of any retention. I hate to say it, but dont be surprised if its minimal and it is all deferred comp. T-12’s are dropping by the day. Wonder what time frame they will use to measure if they even have a bonus. The strategy here is clear. Keep the FA in line and string em out as long as possible. The more time that passes the less likely guys will take deals or even be able to get one. The window of opp for deals has a limited shelf life and exp date will be coming up within the 1st qtr. Then only the very very best will be able to command anything.
Just took a call yesterday the big deals are still there. WFC will have to announce something in the next 2 weeks. Deal closes 23rd of Dec. I can not see any set of circumstances where retention isn't announced before then. If it isn't announced before the deal is inked it means no retention period.
As I said before, what Wells does here makes it crystal clear how they view brokerage. It is a clear signal of what the future will look like. I for one have no interest in working for a firm that would as soon screw me and the client because they simply do not care and see it as a way to increase revenue for the bank.
Every bank screws it brokers, it is a fact of life. Banks are especially good at getting paid twice on every trade. How much do you think the bank marks up syndicate cd’s and structured products? They take a cut, then they also take 60% of whatever our commission is. When the dust settles, you are probably getting only a 20 - 25% payout of the real commissions. I am betting the commissions they pay on “banking services”, is a fraction what they pay to independent leasing firms and mortgage brokers that refer business to them.
I would love to know what % of total revenue generated the broker actually gets paid. Add up the postage and handling fees, the money market spreads, bond dept markups, account fees and every other fee a bank charges, I bet the real "payout" is 25% at best.Hey BukiRob, switching over your U4 shuts down in about two weeks for the rest of the year. I’d say you are sticking into 2009 waiting for Danny Bucks. You keep saying over and over again that the silence is deafening. You might want to listen to what you are saying.
I dont know one FA (big producer or small) where the number one question on their minds is WHERE IS THE RETENTION!!!. Does mgt get this??? Its a damn distraction, thats for certain.
[quote=mnbondguy]Every bank screws it brokers, it is a fact of life. Banks are especially good at getting paid twice on every trade. How much do you think the bank marks up syndicate cd’s and structured products? They take a cut, then they also take 60% of whatever our commission is. When the dust settles, you are probably getting only a 20 - 25% payout of the real commissions. I am betting the commissions they pay on “banking services”, is a fraction what they pay to independent leasing firms and mortgage brokers that refer business to them.
I would love to know what % of total revenue generated the broker actually gets paid. Add up the postage and handling fees, the money market spreads, bond dept markups, account fees and every other fee a bank charges, I bet the real "payout" is 25% at best. [/quote] This is a key point! it's not just what your payout percentage is, it is what is the real gross commission, not what is shown to brokers. Makes me want to think RIA.I imagine if we get paid say 4% for an annuity trade, then the bank is keeping 3 or 4% on top of that for the house. I;m not sure what the real commission rate is other than what we see. Obviously the % is significantly more.
A lot of annuity companies pay 6% or 7% gross if you do not take the trail option. You are CORRECT. The house keeps the difference. A while back, the banks tried to go “product neutral” so rogue FA’s would not be tempted to sell a higher paying annuity over another one that may be more suitable… The problem is, the bank kept the difference (gladly) and nailed the FA. Some banks put breakpoints in place even like mutual funds to discourage large annuity purchases…all in the name of compliance.
Anyone here get word of or hear about a conf call at Wach this Fri re retention?? I heard 3rd hand info an email was out in another region but I haven’t seen it yet. Couldn’t confirm the validity of the info, so may be source just heard incorrectly.