Merril Lynch Yoou Turn Essay

415 WordsJun 9, 20152 Pages
Merrill Lynch—Questions 1) What will be the result of the bidding war for top brokers? Will most firms benefit? Who will be the winners and losers? What about the brokers? A bidding war can be defined as a situation where two or more buyers are so interested in an item (such as a house or a business) that they make increasingly higher offers of the price they are willing to pay to try to become the new owner of the item. In this case, the buyers are the financial institutions like Merrill Lynch, Edward Jones, Morgan Stanley, etc. and the item being the top brokers. With Merrill Lynch wanting to add nearly 1,200 top brokers to their firm, they must engage in a bidding war which is quite expensive but necessary to keep or gain competitive advantage over other firms and to increase their market share. For the top brokers, this could cause them to receive higher salaries and bonuses at their current firm or at their new institution at Merrill Lynch. Because wealthy clients tend to be more loyal to their advisors than to the advisors’ firm, the firms that acquire the top brokers will also acquire new clients. However, not all firms will benefit. In fact, it’s the larger firms with a lot of capital that will survive the bidding war and be “crowned” the winner(s) while the smaller firms will suffer and be the losers as they simply cannot compete because they cannot afford the expense of a bidding war. This “bidding war” is something we see in every industry—the top performers of smaller companies are being recruited by larger companies in the same industry. In some cases, no matter what a company may offer a top broker, he or she still may not wish to change firms for the bigger salary and/or bonuses. In larger firms, there are still things that they cannot offer that smaller firms can such as the environment, relationship with co-workers, the

More about Merril Lynch Yoou Turn Essay

Open Document