Merrill Brokers Get Ultimatum: Refer New Customers or Face a Pay Cut
Merrill Lynch will require its brokers to make at least two client referrals to other parts of parent Bank of America Corp. next year to avoid a cut in pay, a move that comes as Wall Street brokerages try to drum up new business while avoiding the type of aggressive cross-selling tactics that shook Wells Fargo & Co.
At Merrill, brokers who fail to refer at least two customers in 2017 to other parts of Bank of America—including its online brokerage platform Merrill Edge, its retail bank and other units—will have 1% shaved from their take-home pay or deferred compensation, depending on how much they produce in fees and commissions, people with knowledge of the matter said. That is up from one referral this year.
The change comes as rival Wells Fargo & Co. continues to deal with the fallout from aggressive cross-selling practices that led to the opening of as many as two million retail-banking and credit-card accounts with fictitious or unauthorized information. Wells Fargo in September agreed to pay a $185 million fine federal and local regulators related to the cross-selling practices, though it neither admitted nor denied any wrongdoing.
Merrill, however, requires its brokers only to make a referral to another Bank of America unit, giving them credit regardless of whether it generates new business—a key distinction compared with the incentives that were offered to retail bank employees at Wells Fargo.
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http://www.wsj.com/articles/merrill-lynch-brokers-must-make-referrals-to-bofa-units-to-avoid-pay-cut-1481124089
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