Wachovia Securities is joining the crowd of banks — Bank of America and Wells Fargo among them — offering up-front money as a recruitment incentive.
The offer extends only to brokers who work in its bank branches (Wachovia has several different affiliation levels, including bank branches and is acquiring Prudential Securities' broker network).
The deal, according to several sources, is generally for reps with about $300,000 in annual production. The most lucrative deal from an upfront perspective offers a 50 percent bonus of trailing 12-month production at the front, which is forgivable over the following five years.
The second type of deal has a smaller upfront bonus: 25 percent upfront, with a 10 percent bonus based on the trailing 12 production of the rep for the next five years. Each of those 10 percent bonuses is constructed as a five-year forgivable loan, according to recruiting sources. Meanwhile, the final type of this recruiting offer has no upfront money — but instead offers 20 percent bonuses for five years.
Registered Reps between $250,000 and $300,000 in annual production are also eligible for bonuses, but at a reduced rate.
Recruiters say the deals, as well as those offered by other banks, are evidence that the bank brokerages are getting more aggressive with their recruiting efforts. However, Wachovia Securities is the only one with a sales force of any size that rivals the New York-based wirehouses. The firm currently has about 8,000 brokers, although that includes Series 6 licensed reps.
“The truth is the banks, in the past, had always felt value-added for the bank broker was the ability to tap into bank clients,” says one industry recruiter. “But with Wells Fargo and Bank of America doing this for a while, Wachovia felt it had to step up to the plate.” Wachovia officials were not available for comment.
