It's almost hard to believe that it's been a year since that fateful weekend in September that saw the end of the once-mighty Merrill Lynch as a stand-alone firm. At the time, many Merrill brokers understandably feared the worst. Consumed by the biggest retail bank in the land (by deposits), they were left to ponder the fate of their esteemed brand. Would they be transformed into bank-based brokers chasing the assets of the mass affluent?

But just a year later, things don't seem nearly so bad, says Bill Willis, an industry recruiter and former Merrill broker. "The first year has gone remarkably well for the brokers. The ship has been steadied, the share price has gone up and brokers are saying that it's good to be back on the road to financial stability."

And to top it all off, the company hired Sallie Krawcheck last month to run its global wealth management business, a move that was generally viewed as a positive for the advisors.

One $1 million-plus Merrill broker based in the Northeast credits the relatively easy transition to BofA's hands-off approach. "There's been no real change in my business," he says.

It hasn't been all smooth-sailing, though. There's been a barrage of negative headlines to deal with, from the price of John Thain's rug in his newly-decorated Merrill Lynch office to the uproar over the awarding of executive bonuses as the company was sinking.

And while the higher-end brokers seemed pretty pleased with BofA's efforts to lock them in with generous retention packages, there were plenty of miffed producers below $500,000 who didn't get anything at all.

Thinning the Herd

All of this took a toll on Merrill's advisor force. In the third quarter of 2008, Merrill had 16,850 advisors. By the second quarter of 2009, it had shrunk by a dramatic 10% to 15,008.

To be sure, the majority of Merrill's decrease was due to its decision to cut lower-producing advisors and trainees in the first quarter of 2009. But, Merrill also lost some of its big producers and their assets—in the first quarter of 2009 Merrill reported net asset outflows of $43 billion.

Now, Merrill, under BofA, seems to be on the hunt to add to its ranks. It's offering a very competitive package that "has almost unlimited upside for top producers," says an industry recruiter. But there's one catch-advisors need to reach some pretty big growth targets to maximise their deal. This distinguishes the Merrill deal from others on the Street, say recruiters. For a firm that traditionally hasn't needed to recruit as aggressively as some of its rivals, headhunters say that this is probably as forceful as they've ever seen it.

Under the Merrill deal, new recruits can earn 140% of their trailing-12 production upfront and then earn a percentage of their actual production in annual bonuses. The bonus schedule begins at 60% of actual production the first year, and then declines by 10 percentage points each year for the next five years: 50% in the second year; 40% in the third year and so on.

But it's not just a given. In order to earn these bonuses brokers have to meet certain asset targets. In the first year, brokers would need to transfer 65% of their original assets; in the second year, 90%; third year, 110%; fourth year, 125%; and in the fifth year, 150%.

Essentially, this means that brokers would need to increase their assets by 50% by the end of the fifth year. But that may not be as hard as it sounds, say some headhunters. Everyone's assets declined, so they're coming off a lower base. If the market continues its rebound, asset figures should also recover.

By contrast, Morgan Stanley Smith Barney is also reportedly offering a competitive recruitment package, but without the same focus on growth. First quintile brokers can get 140% of their trailing-12 production upfront, plus an additional 20% when they transfer 70% of their assets. They then earn the remainder of the deal, which can reach a maximum of 250% all-in, by transferring the remainder of their assets. (Both Merrill Lynch and MSSB declined to comment on their recruitment packages).

The Sallie Factor

The company made headlines last month when it hired Sallie Krawcheck, the former head of Smith Barney, to run the global wealth management business.

Chip Roame of Tiburon Strategic Advisors sees the hire as a positive move for the retail brokerage force. "She's a top notch executive who believes in open architecture and allowing brokers some latitude in how they build their businesses," he says.

The one mark against her is that she was never a broker herself, Willis says. "It makes brokers question her ability to embrace what they do," he says. Furthermore, Dan Sontag, who was running the retail brokerage but left the firm just a day after Krawcheck was named as his new boss, was a 31-year Merrill veteran who had started out as a broker.