Is the $40 million dollar settlement really a resolution? That’s the ‘scuttle’ this week on the block.
Or is it opening a door to further claims and litigation?
The settlement for deferred compensation will go to about 1, 467 financial advisors who were formerly employed with the firm and had production levels of $500,000 or less (the terms of their compensation was most negatively impacted by the BofA acquisition).
Putting the numbers to it, it’s about 25 to 30 cents on the dollar.*
If dissatisfied with this, or viewing the settlement as unfair, some advisors may opt to go through arbitration instead where the outcome is on a case by case basis. And that can be a can of worms too.
But it goes further than Merrill advisors.
With all the merger and acquisition transactions the past three years, more financial advisors who worked at other firms that have gone through transitions may be looking into their employment and compensation contracts too.
It won’t end with Merrill’s $40 million settlement.
* OnWallStreet.com, “After the Merrill Settlement…” by Lori Konish, 08/26/2012