27 Oct 2008

100% retention bonuses for Brokers

It seems strange that BofA is ready to offer substantial retention bonuses for the retail brokers at Merrill Lynch. Apart from the image-problem that this generosity might create in the present political climate one has to ask the following questions: where would all these brokers move to if they would not receive a retention bonus of this magnitude? Would clients be comfortable moving their funds in these uncertain times? Does Merrill Lynch not have any adequate no-compete clauses in its terms of employment that prevent the brokers from taking their clients with them? And if the financial advisers get these juicy retention payments, what will their customers thing most of whom probably have lost a lot of money?

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