Despite the bear market, recruiters say a number of firms haven't stopped hiring established brokers, and in fact, recruiting has picked up at several big wirehouses, including Merrill Lynch, UBS PaineWebber and Salomon Smith Barney.
PaineWebber, sources say, has been the most creative in terms of the deals that it is offering. While the traditional practice has been able to offer an upfront bonus based on trailing 12 months of production, PaineWebber is reportedly deferring some compensation. It is now offering bonuses based on a broker's production a couple of years down the line.
That's a bit of a hedge because the firm isn't giving a big upfront bonus to a broker who may not pan out. On the other hand, it keeps the broker from having to struggle with a large debt hanging over his head in a terrible market. Ultimately, the deal could pay off for brokers, who have an incentive to do well in the future.
“Other firms are basing their deals on the broker's business as of right this minute, which appeals to some and not others,” says one recruiter. “But if you're willing to bet a little bit that business will improve, PaineWebber's deals are much more attractive.” A PaineWebber spokeswoman says the firm doesn't discuss recruiting.
Other firms said to be actively recruiting are RBC Dain Rauscher, Wachovia Securities, Bank of America and Legg Mason.
