The WSJ today reprises the New York Post’s story from earlier this month about a culture clash between Merrill Lynch and Bank of America. For all the clashing, though, we’re told that 90% of the brokers who BofA wanted to keep — the ones offered signing bonuses — have stayed.
Still, some have left, either because they weren’t running a lot of money or because they were offered more elsewhere. And some of those might be wondering whether they made the right decision:
Last night I get a call from my Merrill Lynch broker (and a FedEx package this morning) telling me that after much "research and reflection" he is moving his practice to Smith Barney (a division of Citigroup.) I am left with only one question for him: Are you kidding?
This is a big problem for brokers, even if they survive the latest round of Citigroup job losses. In good times, brokers generally lose few of their clients when they move from one shop to another: after all, their clients’ relationship is with the broker personally rather than with the firm.
But these are not good times, and Merrill brokers moving to the beleaguered Citigroup might have a very hard time trying to persuade their clients to come with them. Given that brokers work on an eat-what-you-kill basis, they might be living off their signing bonuses for some time: their annual income might be about to fall dramatically.