As background to all this, recall that Bank of America has promised big bonuses to brokers who stay at the combined bank for the next several years--but limited those bonuses to the top earners. The New York Posts today reports some brokers aren't getting retention bonuses at all, and those garnering less than $1 million in fees are dissatisfied. Brokers also object to the rules about not talking to clients after the brokers leave the firm. Rival brokerages are moving in to hire upset Merrillistas.
We'e told by sources familiar with the situation is a concern over the way the Merrill bonuses are structured. Merrill brokers fear that the retention bonus and annual bonus structure at Bank of America might encourage churning or pressure them into getting clients into products earning more fees for the firm. This kind of policy, coming in a year when clients would have done well by staying out of stocks or even phony cash-equivalents like auction rate securities, would penalize brokers who delivered the most profitable advice to clients.