By Joseph A. Giannone
NEW YORK Feb 21 Bank of America's
Merrill Lynch has launched a more aggressive recruiting campaign
for top-tier brokers, including a bonus paid for transferring
client assets after six months at the firm, two sources familiar
with the new plan said Tuesday.
Merrill Lynch last week told managers that it was offering
brokers from UBS, Morgan Stanley Smith Barney, Wells Fargo and
other firms an upfront cash payment equal to 150 percent of the
fees and commissions they generated during the prior 12 months.
The offer is limited to advisers whose performance put them in
the top 40 percent of their peers, the two sources said.
Merrill previously offered brokers 140 percent up front,
according to one recruiter who was briefed on the changes. The
higher offer lets Merrill catch up with bonuses offered at
rivals UBS and Morgan Stanley, the recruiter said, in a market
environment where it difficult to generate growth organically.
More significantly, Merrill also will pay an additional 25
percent bonus after six months if brokers transfer 65 percent of
the assets they oversaw at their former employer. These brokers
also can receive a 50 percent bonus -- half cash, half stock --
after the first year of the deal if they attract 75 percent of
their client assets.
These payments combined mean some brokers can take home two
times their trailing-year revenue in cash after just one year,
one of the most aggressive packages offered by Merrill, a
veteran recruiter said.
The offer is part of a nine-year commitment, which lets
brokers earn additional "back end" payments based on meeting
revenue and asset-growth goals.
A Bank of America spokeswoman said the company does not
comment on its compensation practices, but noted the firm
continues to focus on hiring and training. "We have and continue
to be a competitive but highly selective recruiter of top
industry talent," she said.
Merrill, the No. 2 U.S. brokerage with about 17,300
financial advisers, has suffered some defections in recent weeks
as rivals like UBS increased their up-front bonuses to 180
percent of trailing twelve-month revenue -- for those who signed
by the end of last year. That was up from about 130 to 140
percent in previous months.
UBS last month announced it had hired at least 14 veteran
Merrill brokers who in total managed more than $2 billion in
The competition for the relatively few top advisers, not
already tied down by previous recruiting and retention packages,
has been heating up in recent months, recruiters said. UBS for
example was offering 210 percent deals with an eye toward luring
One recruiter said the new Merrill program, offered even as
the bank parent scrambles to slash spending and repair a
battered balance sheet, shows the firm is showing renewed signs