Don't Touch That DialDon't Touch That Dial
Pru brokers won't be allowed to jump as freely between Wachovica's channels as some originally thought.
David A. Gaffen
One oft-repeated rumor springing from the Wachovia-Prudential deal has been put to rest — for the time being.
Since the merger, which became official on July 1, was announced earlier in the year, some advisors have believed they would be free to move from Wachovia's captive broker channel into any of its other distribution arms, like Profit Formula (the firm's quasi-independent arm) or FiNet (the mostly independent channels).
However, Tony Mattera, a Wachovia spokesman, says the number of advisors permitted to change platforms is going to be very limited. Five Pru practices petitioned early on in the merger process to move into FiNet, and they were allowed to do so. But Wachovia does not plan to allow such movement on a large scale.
“There are no immediate plans to allow any channel switching,” says Mattera.
The decision could have some staffing implications for the merged firm, recruiters say. “A lot of brokers have been saying that if Wachovia doesn't allow us to make those switches to that independent platform, which is very appealing, a lot of people are going to leave,” says one recruiter. He says many Pru brokers were considering jumping ship a few months back, but that activity has calmed a bit, with many wanting to wait to see how the merger shakes out before making any decisions.
Nevertheless, the rumors about channel switching persist — perhaps because no one is doing much to squelch them. At recent industry conferences, Prudential brokers have asked Wachovia recruiters if switching was going to be permissible, and the recruiters let it dangle as a possibility. Further, some have suggested that the issue is just on hold until a more comprehensive review can be undertaken — perhaps in 18 months, when the current compensation plan is to be re-evaluated.
At any rate, channel switching among Wachovia brokers is exceedingly rare, and new advisors recruited to Wachovia have been generally been given the opportunity to work in the area that makes them feel most comfortable. So perhaps there is room yet for compromise.
