Bank of America finally gave in and agreed to join the industry-wide protocol in an effort to prevent an exodus of Merrill Lynch financial advisors.

The move is the latest chapter in the saga following Bank of America's purchase of Merrill Lynch in an all-stock deal valued at $50 billion. In late October, Bank of America and Merrill Lynch revealed the terms of retention packages for top producing advisors in the 16,850-strong brokerage force. But many advisors weren't happy with the so-called "Advisor Transition Program Agreement" (ATP).

As one lawyer, Patrick J. Burns Jr., noted in an email, many advisors were concerned because of a clause that said all customer information is confidential and proprietary to Bank of America. That clause flew in the face of the industry-wide protocol that allowed brokers to take client information with them, without fear of being sued by their old employers, when they switched firms. Many large brokerage firms had signed on to the protocol in order to stem the tide of litigation that hurt clients and usually ended in legal settlements. In fact, Merrill Lynch had been one of the early signatories of the pact.

Keith Banks, president of Bank of America's Global Wealth & Investment unit, called his company's recent commitment to the protocol "one example of how we're moving quickly to bring together Bank of America and Merrill Lynch."

In a Nov. 7 memo to advisors, Robert McCann, Merrill Lynch's vice chairman and president of the global wealth management division, wrote: "There was a concern that since Bank of America Investment Services was not a signatory to the recruiting protocol covering the information an FA could take upon leaving [Merrill Lynch], signing the agreement could somehow limit the information an FA could take upon departure." As a result, McCann explained in the memo, "we are adding an amendment to the ATP Agreement explicitly stating that the protocol prevails over any provisions of the agreement and that each FA who signs it will be covered by the terms of the recruiting protocol for the duration of the agreement."

It was Merrill's wealth management unit that attracted Bank of America in the first place. The bank's CEO Kenneth Lewis called the broker unit "the crown jewel of Merrill." And the combined company made enticing offers to keep top producers. Those in the higher rungs were offered a package of up to 100% of their trailing-12 annual production and would be allowed to keep the bonus if they stayed on for seven years. But other smaller producers weren't offered nearly such sweet deals. And as a result, many were expected to stampede for the exits. Joining the protocol was one way to appease them.

"Merrill is putting extraordinary pressure on people to sign the retention contract," says Danny Sarch, a recruiter whose firm Leitner Sarch Consultants is based in White Plains, N.Y. "This takes the pressure off" to sign by the Nov. 14 deadline.

But Sarch predicts many departures in the first quarter of 2009 anyway. "We're seeing many, many people interviewing."

Nonetheless, Bank of America's decision to join the protocol is "ultimately a good thing," says Mindy Diamond, president of broker recruiting firm, Diamond Consultants, in Chester, N.J. "It was the right thing to do for the clients because it's wrong to force an advisor to make a career decision for the rest of their life under the gun," she says. "It's in keeping with the rest of the industry. It gives the advisors a chance to proactively explore their options."