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Merrill’s Retention Bonus Won’t Stop the ‘Heard’ from Running

In conversations with several sources ‘in the know,’ we’ve learned that Merrill Lynch is asking very select, large ‘elder’ producers to sign what sound, look, and smell like retention bonuses but are being sold as retirement compensation.

This is not an original playbook since Morgan Stanley tried the same trick years ago but failed.

Here is the setup from one of our sources:

“Merrill Lynch is telling advisors/teams above $5M to take a payment of 100% of their current T12 and connecting it to their retirement deal. In other words, take about half of your retirement deal now (which is upwards of 250%) and sign this document that you are staying and keeping your business here at Merrill.” Is this a perk or ploy? Read the fine print, you cannot leave the firm and must retire at the firm but also worse.

Gershman Group

“You can imagine what the unspoken consequences of not signing that deal look like to management. If you don’t take the cash it signals that you are more inclined to leave the firm than stay. Now you’ve got a target on your back. If you dot and I or cross at wrong you’ll get fired. That’s the intention here. So this isn’t a retirement bonus, but rather a retention scheme.”

We spoke to another source that backed up these claims. All of this is being done in a very quiet, closed doorway with the firm’s oldest and largest producers. And Merrill has set a precedent over the past year that they won’t blink in firing big producers – not just for industry violations, but rather internal firm policy violations.

As, effectively, Merrill is just trying to look like they care about retaining the ‘Heard’ but only care to retain those they feel are most likely to leave who may receive a double-dip deal (a full 300% + a retirement deal of another 250%= 500%). They can put this kind of pressure on advisors and not worry about the cultural implications since it is no longer Merrill’s culture, it BOA’s. Keeping it ‘niche targeted’ to its top 10% or so of producers makes it seem/feel almost like a perk.

Take a step back and consider the cost. What sounds too good to be true probably is – a financial firm doesn’t give money away for free. Think about it.