Merrill Lynch is not making plans to leave the broker recruitment protocol, according to Andy Sieg, head of wealth management at the firm.
 
Sieg addressed the protocol issue in a talk Monday with his management team, according to a company source familiar with the discussion.
 
Merrill continuously evaluates the competitive landscape, Sieg said, “but we are not making plans to leave the protocol,” said the source, quoting Sieg.
 
Industry observers had expected Merrill to pull out of the recruiting pact, following Morgan Stanley and UBS Financial.
 
Recruiter Mindy Diamond said staying in the protocol was a good move for Merrill. “It tells advisors they trust in them and respect their choice to do what’s best for their clients,” she said via email.
 
But recruiter Ron Edde thinks Merrill might still pull out. “They can always change,” he said. “If they lose 15 or 20 teams, they’ll change their tune pretty quick. The only reason to come out and say this is to try to score brownie points with the sales force.”
 
The wirehouses have been hit with a stream of breakaway RIA firms signing onto the protocol immediately prior to the founders bolting from the big firms.
 
Merrill, along with Smith Barney and UBS, was one of the originators of the protocol in 2004. The agreement allows departing advisors to take customer contact information and solicit those clients.
 
For anti-trust reasons, the protocol originators could not limit which firms signed up, and upstart competitors have taken full advantage. In some cases, firms have also carved out certain units from the protocol, leading to what Morgan Stanley claimed was “gamesmanship” of the pact.
 
Sieg said Merrill is hoping to create organic growth by supporting the troops, rather than by forcing them to stay.
 
In October, the firm announced a new pay plan for next year that will offer an extra two percentage points of payout if brokers meet certain thresholds for new assets and households. But, the plan also implements a two-point cut if they don’t meet the thresholds.