Family Office
Loyalty is for suckers, says Wachovia Securities

Editor's desk: More ruminations on wirehouses' "unfair' retention policies. Wachovia Securities won't drop a cent to keep brokers from jumping ship as the retail brokerage's advisors get used to its new status as a unit of Wells Fargo against a backdrop of continuing asset-value erosion and general market turbulence.
Wachovia brokers got the news in a conference call with Wachovia Securities chief Danny Ludeman last week.
Although Wachovia brokers won't be rewarded for staying put in a volatile market, seasoned brokers at rival firms are being courted with signing bonuses equal to as much as 180% of their trailing 12-month production.
That which doesn't kill us
This, it seems, has got some Wachovia brokers seeing red -- a sentiment in no way lessened by Ludeman's intimation on the conference call that the firm is hiring like crazy. As of last Friday, Wachovia had hired 355 brokers with more than $181 million in trailing 12-month production since this year began.
Word of Morgan Stanley's and Citigroup's pledge to pour around $3 billion into retention bonuses for their top producers as the two companies prepare to merge their retail brokerages -- a plan reminiscent of Bank of America's retention program for Merrill Lynch advisors -- is cited as further reason for unhappiness among Wachovia brokers.
But Wachovia Securities doesn't seem to be blinking.
"Offering a traditional retention bonus to its financial advisers in the current environment would not be appropriate," a Wachovia Securities spokeswoman told Dow Jones the other day. "Certainly, lately, with the environment the way it is, brokers outside the firm are listening and appreciating the choice and relative stability we offer them."
Relative seems to be the operative term in a competitive landscape in which the once mighty Merrill goes teetering into unwilling arms of Bank of America, financial-service supermarket Citi effectively mortgages Smith Barney to stave off collapse, and UBS' U.S. private-client unit goes in furtive search of shelter from a storm that won't quit. By those standards, Wachovia's slide into Wells Fargo -- enlivened by an early-innings feint toward Citi -- has been a merger of pictorial perfection.
But it's still hard to think of Wachovia Securities as a destination of overwhelming preference to other wirehouses.
It's likelier that Wells Fargo, which has already seen $11 billion go down the drain as a result of its tie-in with Wachovia, isn't in the mood to pay to keep workers in a unit it never much wanted when it can preserve scarce funds for use in harming rivals and increasing overall productivity. -FWR
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