Many former Merrill Lynch advisors are "disappointed," many out-right "insulted," by the retention package Bank of America has offered.
"So far the reaction is mixed," said Darin Manis, CEO of RJ & Makay, a financial advisor recruiting firm based in Colorado Springs in a press release. "Advisors doing over $1.75 million in individual production is where Merrill/BofA drew the line for their best deal. Advisors doing under that didn't fare as well."
RJ & Makay spoke to "dozens" of financial advisors over the weekend and found the concensus is that those advisors under $1 million in production are very disappointed with their offered retention package -- "We've heard the word 'insulted' a lot," Manis said.
According to RJ & Makay, financial advisors can typically get 200 percent-plus of their production to move to firms like Citi Smith Barney, Morgan Stanley and UBS. A $700,000 Merrill producer can stay and get about $175,000 in cash on a seven-year term and a 25 percent growth bonus over three years. Or, the same advisor can go to a competitor and get around $850,000 in cash on about a nine-year deal plus another $700,000 or so back end bonuses (after one to two years).
"For most of the rank and file advisors the amount offered is low and a seven-year term is high for such a low amount," Manis said. "For most of the Merrill advisors this isn't a retention package, it's an attrition package."