Merrill Lynch’s Sunset-Plan Presents Challenges and Issues for Retiring Advisors

Posted on March 16th, 2021 at 4:21 PM
Merrill Lynch’s Sunset-Plan Presents Challenges and Issues for Retiring Advisors

From the Desk of Jim Eccleston at Eccleston Law LLC:

Nearly every major brokerage firm offers its own succession or sunset program that allows senior advisors to retire, transfer their business and monetize in place. The programs can be attractive for a senior advisor who intends to retire. But the devil can be in the details. As a result, financial advisors must carefully study the terms of any sunset program, undoubtedly with the assistance of a qualified financial services attorney. 

For example, the advisors who agreed to Merrill’s Client Transition Program (CTP) may be truly “stuck”, which ought to serve as a warning for other senior advisors. Senior Merrill advisors are discovering that the firm’s CTP agreement is restrictive as it contains clauses of which several advisors report they were unaware. In fact, one source describes the CTP agreement as “the most stringent” of all sunset programs. 

More than a year ago, Merrill announced that it intended to focus on retaining its current workforce rather than aggressively recruiting new talent; Merrill’s CTP agreement appears to qualify as one of those initiatives. According to feedback from Merrill advisors and attorneys familiar with the sunset program, Merrill is pushing harder than competitor firms to bind top producers to the firm for the remainder of their careers. The result is a retirement program that not only requires careful scrutiny before agreeing to its terms, but also an evaluation of what other transition and succession options are available in the marketplace at other financial services firms. 

Eccleston Law LLC represents financial advisors nationwide.  Feel free to contact us to discuss your situation.

Tags: eccleston, eccleston law, merrill lynch

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