June 5, 2012 / 9:19 PM / 7 years ago

Merrill broker boomerangs after week at rival firm

NEW YORK (Reuters) - Ten days after adviser Steven Briggs resigned from Merrill Lynch to join rival brokerage Morgan Stanley Smith Barney - a move that ended a 30-year tenure at the firm - the veteran broker made a U-turn.

Regulatory records on Tuesday showed that Briggs, who managed $200 million in client assets and generated just under $2 million in annual production, had returned to his Merrill office in Bloomfield Hills, Michigan, on Monday.

Reuters tracks the movement of individual advisers or teams that manage about $100 million or more in client assets and generate about $1 million or more in annual production.

Briggs’ quick turnaround is a rare occurrence in the brokerage industry, especially among veteran brokers whose big books of business include many client accounts.

“It’s very unusual to have anybody change their mind after just a week,” said New York-based financial services recruiter Danny Sarch, who has worked in the industry for nearly three decades.

Briggs, who did not return calls seeking comment, did not have far to go when he made his return. Morgan Stanley Smith Barney’s Bloomfield Hills office is less than a five-minute walk from Merrill Lynch’s office on Woodward Avenue.

Merrill’s Bloomfield Hills office is home to three of Barron’s 2012 list of top 10 ranked advisers in Michigan. The Detroit suburb ranks among America’s wealthiest cities, with median household income of $133,370 - more than double the nationwide median, according to the 2010 U.S. Census.

A Morgan Stanley Smith Barney spokeswoman confirmed late Monday that Briggs was no longer at the firm, but declined to comment further. Merrill did not return a request for comment.

New Jersey-based lawyer Tom Lewis, who works with advisers transitioning from one firm to another, estimates that less than 1 percent of the 1,500 brokers he has helped transition returned to their old firms. In those cases, he said, the return was usually at least a year later.


Lewis said a boomerang broker’s reasons for returning run the gamut from technical problems, cultural clashes at the new firm, trouble transferring key client accounts or a close tie to a former manager.

In those cases, the hefty signing bonus that brokers receive when moving to a new firm is not enough of an incentive to keep them on board. Brokerages have been known to give coveted advisers signing bonuses of close to 200 percent of their annual trailing revenue production. For Briggs, that could have meant nearly $4 million on day one.

“Sometimes ... they realize quickly that the upfront bonus isn’t necessarily nirvana,” Lewis said. “They realize they were better off in their old position.”

But a retracted move is no walk in the park for a broker.

“It’s extremely awkward because when a financial adviser is resigning they usually spend the whole day talking to clients about how great the opportunities are at the new firm and how great the benefits are,” Lewis said.

After trying to convince clients to follow - with their money - to the new brokerage, a boomerang broker has to re-pitch his old firm.

The U-turn is also embarrassing for the jilted rival, who loses a big recruiting win. Wall Street firms try aggressively to hold onto top producers - and poach the best brokers from their rivals. Elite brokers control large pools of client assets, which translate into big bucks for the brokerage.

Merrill Lynch, owned by Bank of America (BAC.N), and Morgan Stanley Smith barney, formed after the merger of Morgan Stanley’s (MS.N) wealth unit and Citigroup’s (C.N) Smith Barney, are the top two U.S. brokerages by client assets.

So far in 2012, Merrill has lost at least 92 experienced advisers who managed more than $16 billion in client assets, based on moves tracked by Reuters.

Morgan Stanley Smith Barney has lost around the same number of experienced advisers, but those who left managed less in client assets at just over $8 billion.

Reporting by Ashley Lau

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