With Securities America's advisor network under bombardment from recruiters at other brokerage firms, its soon-to-be parent, Ladenburg Thalmann, reportedly is offering advisors retention bonuses of about 15% of the annual fees and commissions they generate if they stay through 2013. As retention bonuses go, they are not that high.
But when contrasted against the 20% to 25% "transition assistance" packages rival B-D's are offering Securities America reps to jump ship, they represent a reason to remain with the Omaha, Neb.-based firm. According to one recruiter, "An advisor is unlikely to switch broker-dealers for just a 5% or 10% differential" in a compensation package unless there are other compelling reasons, like technology, practice management support or marketing assistance to prompt them to move.
Of course, the actual size of the retention bonuses may vary depending on the amount of business they do and the nature of their business. "Together with Ladenburg, we are offering competitive retention bonuses based on criteria including production, profitability and business growth," a Securities America spokeswoman said.
Last week Ladenburg Thalmann agreed in principle to acquire Securities America from Ameriprise Financial for between $150 million and $220 million, depending on how the brokerage performs over the next two years. Ameriprise decided to sell Securities America after agreeing to settle a variety of lawsuits arising from bogus private placement securities from Medical Capital Holdings and Provident Royalties.