Citigroup Inc.'s (NYSE:C) Smith Barney unit has lost 539 financial advisers in 2009 so far,
according to Crain's.
Apparently competitors such as Wachovia Securities and UBS Financial Services Inc. are luring them away -- this despite efforts to lavish $3.5 million to reward top-performing advisers at its Smith Barney brokerage unit ahead of combining it with Morgan Stanley's (NYSE:MS) brokerage via a joint venture.
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According to Crain's, Wachovia Securities grabbed 115 brokers, and UBS
picked up 113 advisers from the brokerage. For UBS, it marks the second time it poached a top Smith Barney broker with its hiring of
William L. Schoff's team of 10 financial advisers. Schoff joined as a managing director, where he'll rejoin long-time Smith Barney colleague Robert J. Callanan Jr., who became a UBS managing director in February.
However, large rivals are not the only firms raiding Smith Barney for talent. Apparently, regional brokerages such as Raymond
James Financial Inc. (NYSE:RFJ) and Oppenheimer Holdings Inc. (NYSE:OPY) have attracted Smith Barney advisers too, according to
CNN Money. In some
cases, brokers were offered about 250% of their production, according to the article. However, CNN Money reports that the advisers that left were low
performing and generated less than $500,000 in fees and commissions
over the past
year. Most didn't receive retention packages and were not a part of the
1,000 or so brokers that received
$3,000, $2,000 and $1,000 debit cards.
Nonetheless, departures were expected due to Citigroup's falling stock price, the
potential for more government intervention and additional uncertainty
surrounding its recent joint venture with Morgan Stanley.
And through it all, Smith Barney is still recruiting. In fact, it reportedly recruited four advisers last week, whose
earnings totaled around $6.02 million on assets of almost $4 billion, according to
Financial Planning. -
Maria Woehr
