I saw this morning that four Morgan Stanley Smith Barney branch managers recently left the firm – two went to competitors and the fate of the other two was not known by the reporter. It got me thinking, is there a worse job in this business than being a branch manager, especially at a wirehouse?

You will know from past blogs that I am not one of the many wirehouse bashers – I have spent many years at these large firms, and despite recent difficulties, I feel that they will have their day once again. But over the past few decades, the role of branch management has changed, and not for the better.

Historically, compliance jobs were always considered the worst in the industry. Everyone hates those anti-business people in compliance and legal, don’t they? Realistically, we know that they are a necessary evil and in fact there to protect us – but it was always fun to blame them for everything bad. But now, in today’s world of transparency and full disclosure, compliance has become a friend more than a foe. In fact, almost unheard of years ago, people sometimes look for that “no” to avoid things that they really don’t want to do!

Conversely, branch management used to be a glamorous job. The branch manager was respected, helped train and mentor the rookies, held productive sales meetings and stood up for his guys when the home office was being difficult. Those days are behind us, especially at the wirehouses.

Branch managers have largely become babysitters – bringing down the hammer at the request of the home office, and often saying no to protect themselves. I have an old friend who was a branch manager. His firm asked recently him to fill-in temporarily when they were between branch managers. He did it – but only out of a sense of loyalty, and he did it kicking and screaming!

To cut costs, many branch managers have been let go in place of complex managers, pay has been cut, and I’ll bet we all know tons of former branch managers who are now producers.

So yes, I think that the worst job in financial services is definitely branch manager.

What do you think?

Any way you slice it, the cultural problems between the “old” Merrill Lynch and parent Bank of America persist. Part of the problem is the classic meshing of a bank with a brokerage firm.

Business Week’s article this week on the firm (entitled “The Bull Whisperer”) highlighted many of the potential causes of the continuing conflict – Bank of America’s “connectivity” initiative (a.k.a. encouraging/mandating cross-selling of proprietary products), the desire of the bank to have brokers get rid of smaller accounts (or at least offer smaller clients less service), the low price of the stock, the continuing bad press surrounding the bank, etc.

Whether you support the notion that the partnership is not working – Merrill brokers are leaving in larger numbers than the competition – or you think the partnership is working – brokers have access to more liability-side services – there is one clear lesson: brokers just don’t like being told what to do. All other reasons aside, and regardless of the rationale – increased bank profitability – the connectivity initiative is only going to drive more brokers away.

The bottom line is that the large broker/dealers will continue to exist, and many brokers will continue to make the move to independence. Regardless of the reasons for the larger number of brokers leaving ML, the lesson for upper management is that you can’t ignore cultural differences. To do so will lead to continued unhappy marriages like the ML/BofA one.

Having said that, I understand that in the case of this merger there really was no choice – the merger happened at the apex of the financial crisis and ML was headed toward certain bankruptcy. So in cases like this, management needs to be a little smarter, recognize the irreconcilable cultural differences and stop trying to put a square peg in a round hole.

Since the release of the SECs report on the Fiduciary Standard last weekend, it has been the talk of the industry. I therefore feel compelled to add my two cents on the issue, especially since it will be one of the most discussed and debated issues of the year (and perhaps next year).

But before I speak to that issue, the SEC also released its report on the need for enhanced examination and enforcement resources for investment advisors; both studies were mandated by the Dodd-Frank Act. This study has gotten far less press, but its implication are just as important. To quote from the results “State regulators may not have adequate resources to continue to assume increased regulatory responsibilities, and investor protection could be compromised if such resources are lacking.”

The study made no final recommendations, but my concern is that regardless of how the fiduciary standard issue finally concludes, lack of effective enforcement will significantly decrease its effectiveness. Especially in today’s atmosphere of governmental budget cuts, don’t overlook the importance of how any eventual legislation is supposed to be enforced. Given the spotty recent records of the regulatory agencies, this study should be garnering a lot more the public discussion.

Now, on to the fiduciary standard. To borrow from another commentator, if this were a baseball game, we would probably be in the third inning – this issue will not be settled for a long time. At issue is if brokers should be held to the fiduciary standard that investment advisors are held to today. Under the recommendation, anyone providing personalized investment advice to retail customers would have to adhere to the fiduciary standard.

Part of the rationale given for the recommendation is that client’s do not understand that there are differences in the standards in place today. The SEC argues that harmonizing the regulation of advice providers would increase investor protection (although no specifics are given). The new standard would require that advisors show that any recommendations they make is defensible and that the paperwork is in place to ensure that investors understand exactly the service they are expecting.

A summary of my two cents:

– This issue will not be decided for a long time, and as the publicity continues the arguments are probably going to confuse investors more than anything;

– Instituting a fiduciary standard that is not enforced will not protect investors;

– Just because investment advisors today are held to this standard does not mean that all investors are protected; and just because brokers are not help to this standard does not mean that investors are being harmed;

– The burden continue to fall on the advice giver (broker or investment advisor) to explain how they act in the client’s best interest – to describe their process and how they hold themselves to a fiduciary standard (regardless of whether anyone else does).

At the end of the day, successful advice givers will be able to articulate their value-added proposition and succeed. The rest of this seems to me just to be a lot of noise……..