Recruiters at competing firms are likely to reach out to bank brokers at Bank of America Investment Services Inc., according to industry observers.
Recruiters at competing firms are likely to reach out to bank brokers at Bank of America Investment Services Inc., according to industry observers.
That's because BAIS brokers are now employees of Merrill Lynch and are covered under the recruiting protocol, which lets departing brokers take customer contact information to a new firm without fear of litigation.
While initially there were questions about the bank brokers' status, Merrill spokesman Bill Halldin confirmed that they are covered by the protocol.
BAIS began terminating its registration as a broker-dealer in October.
Merrill Lynch & Co. Inc. is a signatory to the protocol, while BAIS, the bank-brokerage unit of Bank of America Corp., is not.
Now that BAIS representatives can take customers with them, some already are eyeing the door. “Some [BAIS reps] who have contacted me are contemplating leaving,” said David Gehn, a lawyer at Gusrae Kaplan Bruno & Nusbaum PLLC.
Before the shift, BAIS sued some brokers who had left this year, said Patrick Burns, a Beverly Hills, Calif., attorney who represents brokers in transition.
“This is a 180-degree change in way they do business,” he said.
If BAIS brokers are able to transfer accounts, they might be able to command attractive recruitment offers, Mr. Gehn said.
But one source close to Merrill, who asked not to be identified, said there's no reason for BAIS brokers to leave now that they have been being upgraded to Merrill's platform.
BAIS never signed the protocol, because its replacement by Merrill's broker-dealer had been planned all along, this source said.
E-mail Dan Jamieson at djamieson@investmentnews.com.
