Tension Grows As Merrill Advisors Wait On Retention Packages

Matthew Smith

22 October 2008

Merrill Lynch advisors are growing “increasingly pessimistic” about the quality of a retention package currently in the offing and their future with the brokerage firm as the press reported an analyst prediction that 10,000 jobs would be cut at the company.

Many Merrill advisors are worried about the quality of a retention package that has been promised since Bank of America bought Merrill for $50 billion in September, said Darin Manis chief executive with recruiter RJ & Makay, who said he is currently talking to “dozens” of Merrill financial advisors every day.

“Because of the way BoA took over Merrill – within a week – advisors are worried retention was never part of the thought process,” Mr Manus said.

He predicted the packages would be announced sometime between Halloween and Thanksgiving .

“Halloween would be an appropriate time because I think it is going to scare a lot of people,” he said.

Meanwhile, Bloomberg reported that Ladenburg Thalmann analyst Richard Bove wrote in a note to clients Merrill might eliminate 10,000 jobs following the completion of the acquisition.

“Bank of America's "slash and burn" style following acquisitions is likely to be pronounced at Merrill,” Mr Bove said in the note.

Merrill chief executive John Thain said he expected "thousands'' of job losses in a television interview.

Mr Manis said there are plenty of advisors poised to leave the brokerage firm if they are not happy with the quality of the retention package.

“There are a group of advisors who will stay no matter what is offered, but there are plenty of advisors – in the thousands – who are either leaving now or who will be ready to move if they are not happy with the packages on offer,” Mr Manis said.