Questions surround the status of BofA bank brokers

Bank of America Investment Services Inc., the bank-brokerage unit of Bank of America Corp., is in the process of terminating its registration as a broker-dealer.
Although the status of the bank representatives could not be confirmed, sources said BAIS brokers are thought to be employees of Merrill Lynch & Co. Inc., which has a majority stake in the bank brokerage.
Observers say the immediate question is whether the bank brokers at BAIS, which filed withdrawal requests with regulator in October, will be covered under the recruiting protocol.
Merrill is a signatory to the protocol, which lets departing brokers take customer contact information to a new firm without fear of litigation, while BAIS is not.
David Gehn, a lawyer at Gusrae Kaplan Bruno & Nusbaum PLLC, who represents brokers, said it was his understanding the BAIS brokers are under the Merrill B-D.
“Some who have contacted me are contemplating leaving,” he said. “They want to know if they are covered under protections of the protocol.”
If they are Merrill employees, the BAIS reps would be covered under the protocol, Mr. Gehn said.
Bank of America, however, may not be so accommodating. Bank brokerages have traditionally been protective of their client base, since many brokerage customers are developed from the ranks of the bank’s depositors.
“I don’t know if you [as a BAIS broker] want to be the test case” to determine whether the protocol applies, Mr. Gehn said.
If BAIS brokers are able to transfer accounts, they might be able to command attractive recruitment offers, Mr. Gehn said.
A spokesman for Bank of America did not return calls.

Related Topics: Bank Of America Corp., Merrill Lynch