In a bid to attract a greater percentage of high-net-worth investors as well as attract and retain brokers who sell to that market, Merrill Lynch is revamping its broker compensation plan.
The plan, which is being implemented by James Gorman, the firms new U.S brokerage chief, is an answer to shrinking quarterly profits, which fell 52%, according to a Reuters report. The compensation plan will take effect in January, according to Reuters.
Currently, the payout to brokers for Merrills fee-based accounts is 1.5% on assets held in stocks, 1% on mutual fund accounts and .3% on bond and cash holdings.
Bob Mulholland, Merrills head of client relationship group, said the firm will reward brokers who can bring in clients with $1 million or more in assets a greater percentage of compensation, according to the Reuters story. They will also be offered bigger payouts for setting up loans as well as processing large buy and sell orders, according to Reuters.
The firm is also trying to sweeten the deal for its successful producers by offering them $100,000 downpayments on new homes as long as the broker arranges the mortgage through Merrill.