Wednesday, April 15, 2009

Financial Pros Jumping the TARP Ship

Law firms like mine, that represent financial professionals and firms, have seen a significant upswing in the number of brokers and analysts who are changing firms. With some firms offering over 200% of a broker's trailing 12 as a foregivable loan, this is really not surprising.

Many brokers would have a difficult time rejecting an offer that gave them similar products, platforms and working conditions plus a check for 200% of their last 12 months production. Of course, wire houses are not all the same, and there are significant issues to be resolved in the agreements surrounding such a move. But 200% in a check is a significant amount of money, regardless of what your trailing 12 has been.

That trend appears to be moving to other financial professionals, and we are seeing analysts starting to move. Many Merrill professionals were not happy about the move to Bank of America, and other firms, notably UBS, grabbed those unhappy brokers with those bonus offers.

Not investment bankers are moving. Smaller investment banks are enticing wirehouse investment bankers to jump ship.

These moves are undoubtedly a sign of the times. The neverending attacks on the large investment banks are causing a flight of talent. Why stay with a Merrill and risk losing your compensation because Congress has decided to pander to the masses, when you can take a package at a smaller bank, that is financially sound, and not saddled with TARP issues.

It is a growing trend. Not too good for the large investment banks, but good for the smaller ones, and  maybe good for the economy in the long run.

Just make sure those new employment packages are documented and negotiated by someone who knows the ropes.

Merrill Lynch Loses More Bankers to a 'Boutique' -

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