Merrill to Pause Traditional Recruiting, Try to Lure Indies
Merrill Lynch told several executives that it will pause all recruiting starting June 1, a person familiar with the matter told the Wall Street Journal.
In addition, the wirehouse is putting a damper on large recruitment bonuses for top producers while it devises a plan to lure less experienced brokers, according to the same source.
The move will not affect brokers pursued by Merrill before the deadline. In the meantime, the brokerage is building a new incentive package geared to attract less experienced advisors from independent broker-dealers and regional brokerages, says the Journal’s source.
Merrill’s new recruitment program will focus on advisors with three to eight years in the business and offer guaranteed base pay for three years, similar to programs at brokerages such as Edward Jones, the paper writes. Brokers will also be able to get bonuses and a cut of any fees and commissions they bring to the brokerage, according to the Journal.
After the initial three years with the firm, Merrill will continue paying the new recruits based on fees and commission in accordance with its payout grid, and offer further incentives for peddling lending products and bringing new assets, among other bonuses, the person familiar with the matter tells the paper. Current Merrill brokers’ payout schemes will not be affected by the change, according to the person.
Merrill’s decision comes at a time when signing bonuses are shrinking already, in part as brokerages scramble to reduce conflicts of interest raised by the Department of Labor’s fiduciary rule, as reported previously. On the other hand, with the rule in limbo — its scheduled April implementation date has been pushed back at least until June — Merrill has already backtracked on plans it set in motion to help its brokers comply with the rule, which requires retirement brokers to put clients’ interest first.
Last week, the wirehouse announced that it will allow some commission-based products in its individual retirement accounts, despite announcing a total ban on them in the fall.