Corporate & Securities Law

Recruitment Deals Slim Down But Still Are About 230% For Million Dollar Producers

By James Eccleston

Although the press is reporting that recruitment deals are slimming down, they're still very large.  Recall that only a couple of years ago, there were 100% of trailing 12 month commission deals being made.  That has now changed.  We've reached the peak, being about 250% - 260% of trailing 12 for brokers who generate $1 million a year or more. 

And firms are trimming back, but not by much.  Smith Barney has announced that its total deals are down to about 230%.   Merrill Lynch has said that it is doing the same.  Morgan Stanley has said that it's remaining competitive.  The price tag of course comes with promissory note terms of as much as 9 years, but attorneys at SNSFE work with reps to insure that promissory note terms and employment agreement terms are negotiated to fully protect the interest of the reps. 

Now there are some other firms out there that are not paying this kind of money but are doing other things to attract wirehouse reps.  Those are the regionals, for example, who are putting more emphasis on back-end incentives.  Those also include the custodians for investment advisers like Charles Schwab and TD and Fidelity who are putting together other benefits to encourage reps to join their firms.

Brokers who want information about these deals and who want assistance in negotiating these deals should contact attorneys at SNSFE.

Full post as published by FinancialCounsel on November 20, 2008 (boomark / email).