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By Annie Gasparro

A DOW JONES NEWSWIRES COLUMN

NEW YORK — For brokers at the bottom of the wirehouse ranks, moving to a regional firm seems like a no-brainer, with its higher payout and greater appreciation for the $300,000-or-so producers.

But many of the smaller firms don’t have the transition teams in place to help advisers move clients quickly and seamlessly to the new platform, causing them to lose a lot of assets in the process. And what’s a higher payout percentage without the production?

The major brokerage firms have perfected the adviser transition process, considering the hundreds, and sometimes thousands, of moves they orchestrate each year.

“By the time you drive over to your new office, they already have a whole SWAT team there, setting up your computer and your phone, handling all the compliance stuff. You don’t even have to think about it,” said one adviser who moved between two wirehouses last year.

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By Annie Gasparro
    A DOW JONES NEWSWIRES COLUMN

NEW YORK (Dow Jones)–The steady, if sometimes exaggerated, trend of wirehouse advisers shifting to independent brokerages is proving to be more than just a passing fad.

The independent channel took in about 90 advisers from the four major wirehouses last month, while those wirehouses only hired 25 brokers from independents, according to research firm Discovery’s report on registered representative movement for January.

The four wirehouses are Morgan Stanley Smith Barney, Bank of America Corp.’s (BAC) Merrill Lynch, Wells Fargo Advisors, and UBS Wealth Management U.S. Their biggest indie competitors lately: LPL Financial Corp., Ameriprise Financial Services and Raymond James Financial Services. Continue reading…

NEW YORK — Some advisers are reverting back to the old ways of business, charging clients per transaction, to make up for the dent the market’s making in their fee-based paychecks.

The downturn over the past year has cut most client assets by 20% to 50%, producing an equivalent drop in the earnings of fee-based advisers. With trading volume down much less, transaction-based revenue has been less affected.

One Merrill Lynch broker, who had mostly fee-based accounts when he moved to that firm from UBS AG (UBS) a year ago, said he has been converting his clients. “I’ve got most of my clients back to commissions instead of fees because I’ve got to make a living doing this, and they understand that,” he said.

Over the past several years, the brokerage industry has trended toward fee-based accounts, in which brokers charge clients an annual fee, usually 1% to 2%, of their assets under management, instead of a small commission for each trade. Most major firms encouraged the fee-based model by offering brokers a higher payout on fee-based business.

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   By Brett Philbin and Annie Gasparro
   A DOW JONES NEWSWIRES COLUMN

  NEW YORK (Dow Jones)–If Congress has its way, brokers may not get much of a taste of their coveted retention bonuses.

  Aimed initially at big bonuses received by executives and traders at American International Group Inc. (AIG), legislation passed by the U.S. House of Representatives also appears to encompass retention bonuses received by brokers at Morgan Stanley (MS), Citigroup Inc.’s (C) Smith Barney, Bank of America Corp. (BAC), and Merrill Lynch Global Wealth Management.

  The special tax, as passed Thursday in the House, would claim 90% of bonuses paid after Dec. 31, 2008, to employees with a household income of $250,000 or more by companies that received at least $5 billion from the government’s Troubled Asset Relief Program. The Senate is considering its own version, which differs.
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   By Brett Philbin and Annie Gasparro
   A DOW JONES NEWSWIRES COLUMN  

  NEW YORK (Dow Jones)–The heat over bonus payouts at American International Group Inc. (AIG) is spreading to Morgan Stanley (MS) and Citigroup Inc.’s (C) Smith Barney, and some brokers are starting to feel it.

  Many brokers are bristling over a threat to what they see as customary and legitimate compensation. Securities industry lawyers contend that, just as was argued with AIG, the law obliges the brokerages to make good on promised bonuses.

  Morgan Stanley has fallen under political scrutiny for its plan to dole out $3 billion in retention bonuses to 6,500 top financial advisers at the firm and Smith Barney, with which it is forming a joint venture. Morgan Stanley and Citigroup both received taxpayer funds from the Troubled Asset Relief Program.

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The Dow Jones Newswires column,  BROKER’S WORLD: Wall Street Retention Strategies Challenged by Annie Gasparro says the new Wall Street, the pay-to-stay strategy of brokerages is being challenged.

  While Morgan Stanley is going the traditional route and offering retention bonuses to high-performing brokers in its merger with Citigroup’s Smith Barney unit, Well Fargo chose not to give stay bonuses to any of the 14,600 Wachovia Securities brokers it has acquired.

  Both companies announced their plans Friday, and their opposing  strategies has been the talk among brokers since. Analysts say it remains to be seen which method will be more successful.