Merrill Lynch and Morgan Stanley Smith Barney go toe-to-toe for top brokers

The broker recruiting wars are heating up, with wirehouses jacking up their offers to new heights to lure more representatives in 2010.
DEC 11, 2009
The broker recruiting wars are heating up, with wirehouses jacking up their offers to new heights to lure more representatives in 2010. Morgan Stanley Smith Barney LLC and Merrill Lynch & Co. Inc.'s Global Wealth Management unit are going toe-to-toe by offering tops reps a recruiting package of up to 330% of annual production. Those levels are the highest ever offered, sources said. But because the deals are complicated and tied to a rep's ability to increase business, it's impossible to know how much each broker ultimately will receive. Meanwhile, many wonder how UBS and its new chief, former Merrill Lynch honcho Robert McCann, will react. Some expect him to re¬lease details of a recruiting package as soon as this week that will approach the deals of Merrill Lynch and Morgan Stanley Smith Barney. Before Mr. McCann landed at UBS at the end of last month, the firm was flirting with the idea of giving brokers a recruiting bonus of 365%, sources said. But that deal was pulled off the table after Mr. McCann's arrival, and UBS is currently offering recruits deals in the range of 200% to 220% of their previous year's fees and commissions. Merrill has 15,000 reps, while Morgan Stanley Smith Barney has 18,160 and UBS 7,300. A little more than a year after Wall Street was walloped by the credit crisis, the large remaining firms are hungrier than ever for reps who rank among the top fifth of their firms' producers. “There's still a great amount of competition and demand for the best-performing and targeted teams,” said Andy Tasnady, founder of Tasnady Associates LLC, a compensation consulting firm. “Firms still think it's a profitable purchase for them to make. Internal growth is off, so firms have to buy it.” To read the full version of this story, please see the Nov. 16 issue of InvestmentNews

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