(December 14 – 17:20 ET) – U.S. trade magazine, Registered Rep, is reporting that starting January 1, Merrill Lynch reps won’t get paid for transactions on accounts held by households with less than US$100,000 invested at the firm.

The magazine says that brokers will not receive any payout on trading business for households that don’t meet the new minimum. However, trainees with less than two years on the job will still get a 10% payout on these trades and the rest of the sales force will still be paid by the regular grid on fee-based business, including fee-based accounts, mutual fund sales commissions and trailers.

“No one is going to be prevented from opening a household account under US$100,000 if they make a business decision and think that account will grow into a larger account,” RR quotes Merrill spokesman Jim Wiggins as saying. “But we’re going to encourage, through the new pay structure, annuitized business for accounts of that size.”

The story says Merrill’s retail sales force was told of the move on Monday by executives, including Stanley O’Neal, president of the retail division.

Back in November O’Neal outlined Merrill’s vision for the retail business at the Securities Industry Association annual conference in Boca Raton. “Those who figure out how to offer tiered services through multiple channels … and who can add value at every step along the continuum. Those who do the best job of delivering performance, solutions and service – within a relationship of trust – will be the winners,” O’Neal said in his address.

“We do not even consider ourselves to be in the retail securities business anymore,” said O’Neal. “We’re in the wealth management business.”
-IE Staff