Merrill Lynch

Three Large Brokerage Networks Offering Significant Recruiting Bonuses in 2019

Three Large Brokerage Networks Offering Significant Recruiting Bonuses in 2019

From the Desk of Jim Eccleston at Eccleston Law LLC:

As Merrill Lynch, Morgan Stanley and UBS Financial Services, Inc. have recently pulled back their recruiting efforts in order to focus on growing assets and revenue internally, firms such as Wells Fargo Advisors, LPL Financial and Cetera Financial Group are seeking the opportunity to gain ground by offering attractive recruiting bonuses.

According to Investment News, Wells Fargo Advisors is currently offering an upfront bonus payment of 225% of an adviser’s T-12 if he or she generates more than $500,000 in annual fees and commissions. Furthermore, the deal also includes additional deferred compensation and other payments over time worth 100% of an adviser’s prior year’s fee and commissions.

In addition, last year, LPL introduced a recruiting package in the form of a 3-year forgivable loan which pays an adviser 50 basis points on assets under management transferred to the firm. As a result of this offer, the third and fourth quarters of 2018 were LPL’s best recruiting quarters on record for the firm as it gained a net 899 advisers with $27.3 billion in brokerage and advisory assets.

Following LPL’s footsteps, Cetera Financial Group has announced that the firm will start to offer certain recruits 70 basis points on advisory assets that move to the firm and 35 basis points on brokerage assets. Cetera Financial Group stated that those deals would be in the form of forgivable notes or loans that would span five to seven years.

The attorneys at Eccleston Law assist financial advisors nationwide in their employment transitions, negotiate their transition agreements (including employment agreements and forgivable loans), and defend reps in arbitration and litigation during and after their transition.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

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Current Merrill Lynch Recruitment Deal

From the Desk of Jim Eccleston at Eccleston Law LLC a-history-of-merrill-lynch-when-finance-was-for-the-99

Merrill Lynch has marketed a recruitment deal to financial advisors which consists of an upfront cash payment between 150% and 170%. Additionally, the hurdles in order to meet back-end production goals under the deal are:

·         Year 1: Hurdle – 75% of assets

Payout bonus: 50% of production (from same year)

·         Year 2: Hurdle – 95% of assets

Payout bonus: 40% of production (from same year)

·         Year 3: Hurdle – 115% of assets

Payout bonus: 30% of production (from same year)

·         Year 4: Hurdle – 125% of assets

Payout bonus: 25% of production (from same year)

·         Year 5: Hurdle – 155% of assets

Payout bonus: 25% of production (from same year)

 

All proposed deals are negotiable and reflected in numerous agreements such as promissory note and employment agreements. Reps should retain qualified legal counsel to review those documents in advance of committing to transition to a new firm.

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Barclays Loses Big Producers to Merril

From the Desk of Jim Eccleston at Eccleston Law LLC:

Barclays,_Albion_Street,_Leeds
Ahead of the announced Barclays’ merges with Stifel, two big producers, Jim Ertmann and Ben Foster have left from Barclays to join Merril Lynch.

The team reportedly generated $5.8 million in production during a seven year stint at Barclays. They now are part of Merrill’s Private Banking and Investment Group in Chicago.

Even though Stifel has offered lucrative incentives for those Barclays advisors who remain, Barclays’s wealth unit has lost over $6 billion in client assets and about 50 advisors, since news of the merger was announced.

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.

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Bank Of America-Merrill Lynch Ready to Exit Protocol

From the Desk of Jim Eccleston at Eccleston Law LLC:

According to AdvisorHUB, many signs including the cross-selling, Merrill Edge, US Trust, bank referrals, team analysts and new non-compete contracts, have showed Bank of America/ Merrill Lynch are ready to exit Protocol.

One manager on the East coast at Merrill said the deal structures that Merrill is putting together right now have given advisors many significant pauses. Almost all of the deals have outsized total percentages but also contract lengths. And there is an active program to recruit back Merrill advisors that left the firm 5 – 6 years ago and offer them an extremely lucrative payment. The problem is how the firm can be assured that it will recoup all of that cash.

A director in Merrill Florida branch was concerned about analyst non-compete contracts. The new contracts for team analysts and junior advisors and the non-compete language are about the way to ensure that some members of larger teams are forced to stay at the firm should the senior members leave. Reps are concerned that similar provisions will apply to the tenured advisors.

Other voices are from NYC. They project that Merrill is going to lock up as many legacy recruits as possible, discontinue recruiting, pull out of the Protocol, and elicit non-compete and non-solicit contracts.

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.

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Merrill Lynch Advisors Rumored to Leave the Firm in Large Numbers

merill lynch

From the Desk of Jim Eccleston at Eccleston Law Offices:

Merrill Lynch still is struggling with the issue of retaining advisors. In 2007, Merrill Lynch had a total of 16,740 financial advisors. However, today it has a total of 13,276. That equates to a loss of nearly 30% since 2007.

Merrill Lynch advisors prefer to transition to two specific platforms: wire-house rivals and the growing RIA/hybrid models.  UBS, HighTower, Steward Partners, Wells Fargo and Raymond James have benefited the most from the Merrill issues.

The expiration of retention bonuses has undoubtedly freed many Merrill Lynch advisors. That said the new firms will present forgivable loans and employment agreements that should be reviewed by competent legal counsel, so that the advisors aren’t “jumping from the frying pan into the fire.”

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

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Top Wirehouse and Regional Broker-Dealers Continue to Grow

According to OnWallStreet’s annual ranking of the top regional and wirehouse broker-dealers, wirehouses and regional broker-dealers continue to grow but face challenges.

Last year, Morgan Stanley topped the industry leaders list with increased commission revenues of 6.4%, and fee revenues of 6.2%.

UBS is in the process of transforming itself into a more comprehensive wealth management firm. It is providing advisors with support and training. And to further boost revenues, UBS is aiming to grow its lending business and mortgage offerings. At the end of 2013, UBS already had expanded mortgage lending to $6.7 billion.

Bank of America Merrill Lynch, which topped the wealth management firms’ list by revenue, is aiming to boost advisor productivity through large-scale technology upgrades. The firm recently launched an iPad app, “Merrill Lynch Clear”, which uses interactive graphics and research to help users identify their retirement priorities. Moreover, the firm also is upgrading and combining its platform into a single advisor workstation, Merrill Lynch One, which is expected to be a vital tool for Merrill advisors.

Regional leaders like Royal Bank of Canada (RBC) rapidly have expanded its force in the U.S. market through a number of acquisitions starting in 2000. The firm reported a roughly 15% profit growth in the second-quarter earnings this year. And according to RBC’s CEO, the firm is moving to the next stage to grow its wealth management and capital market business in the U.S. through organic growth and acquisition. 

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