In the News

B of A Forces ‘Garden Leave’ on Brokers After Defection

by Hugh Son and featured in Bloomberg
February, 2011:

Bank of America Corp., which lost a financial adviser with $5.9 billion in client assets to a rival in December, told some workers to sign agreements forcing them to go on reduced-pay “garden leave” if they plan to resign.

Employees of the bank’s U.S. Trust unit received the notice this week ahead of 2010 bonus payments and were told their continued employment hinged on agreeing to the new policy, said a person with knowledge of the correspondence. Advisers who previously could leave after two weeks notice now must remain for 60 days and are forbidden from soliciting clients for a total of eight months, according to a copy of the document.

“They’re sending the message,

One Indie B-D’s New Twist on Compensation

by Liz Skinner and featured in Investment News
January, 2011:

Beacon Financial Partners about a year ago realized that it was time for the growing advisory firm to move to a more sophisticated broker-dealer.
After interviewing independent-broker-dealer giants LPL Financial and Commonwealth Financial Network, the firm chose Capital Analysts Inc., a much smaller firm.

Part of the attraction was Capital Analysts’ novel compensation model, which is based on fees rather than commissions. Instead of the traditional method of taking a small percentage of what advisers sell, Capital Analysts gives advisers a 100% payout and charges an annual access fee.

That fee — which is $40,000 to $120,000 a year, based on revenue — covers the cost of custody, trading technology,

The Fight for Talent

by Kristen French and featured in Registered Rep
November, 2010:

When the Morgan Stanley Smith Barney joint venture was announced in January of 2009, Scott Mowry and his team, all former Legg Mason advisors, knew they were not sticking around to see how it would turn out. The group had been looking into joining an independent b/d for two years. They’d been through one major takeover already, when Smith Barney scooped up Legg, and had given the culture of a big Wall Street firm a try. It wasn’t the right fit. The hasty, desperate dealmaking, the bad mortgages on both firms’ books, the ugly headlines and the TARP handouts, these things just pushed them over the edge.

So when the MSSB retention pacakges landed on their desks,