Part of it might be the accident of the nickname: the thundering herd. It is such an easy temptation for the business media to write that the thundering herd might be a-thundering right out the door.
The problem is, at least this time, it's not true.
Bob McCann, who headed Merrill Lynch's retail brokerage unit, split. It's no surprise that there would be power plays and redundancies in management when a more aggressive New York-based brokerage-heavy firm merges with the comparatively staid North Carolina-based
Bank of America
. But the news that McCann had up and left right after the deal was made official was interpreted as a certain sign that many of the 16,000 financial consultants he supervised would a-thunder after him.
Whenever the business media traffics almost unanimously in an instant and tidy default-mode theory, though, you know it probably left something out. Like reality. Take it from me, a former stock broker.
Brokers have been known to follow a beloved office manager, whom they deal with in person every day, to another firm, but the head of the entire unit? The one who supervises them from 30,000 feet and whom they might see in a crowded ballroom twice a year? Negative.
Moreover, it was far easier for brokers to jump from firm to firm back in the day, when they served more as stock jockeys. Now they are considered "wealth managers." This entails putting their clients' assets in managed money programs, many of which are in-house, especially at Merrill Lynch, which is not called Mother Merrill for nothing. Simply put, its way harder for brokers to move. They'd have to convince clients to give up their entire Merrill-sponsored program, the same one they worked hard to convince those clients to tie their futures to.
If you need further convincing, just know that Merrill named McCann's deputy (not a Bank of America mystery man) to succeed him. Brokers are more than used to this. And if you think other brokerage firms are dangling huge bounties in this economy, with discount brokerage firms and products gaining strength by the day, well, I've got an underperforming in-house fund with a high sales commission to sell you.
Nearly all of these basic details, though, were lost on the business media, including on
, which, in a hyperbolic headline, immediately paged the divorce lawyers: "
headline, McCann's departure was irresponsibly depicted as something tantamount to an actual write-off: "
Another write-off at B of A: Commentary: Bob McCann's exit from Merrill a loss for the brokerage
We are soon told: "His departure says the deal, consummated Jan. 1, isn't working for him. In turn, that tells the rest of the thundering herd, that it may be in their best interests to walk too."
article headlined "
" was topped with a lead hinting of deep trouble to come: "Fresh questions are being raised about the stability of Merrill Lynch's 16,000-plus 'thundering herd' of financial advisers, one of the most powerful and enduring forces in US financial markets."
We were then fed this faulty line of reasoning: "But Mr McCann's departure could open the door for competitors to poach some of Merrill's up and coming advisers. In the two months following the announcement of the BofA deal, Mr McCann spearheaded the bank's efforts to keep the 'thundering herd' intact, encouraging Merrill's top producers to accept the packages offered as retention bonuses."
Trust me when it comes to brokers: As long as someone is handing out retention bonuses, the brokers are not going anywhere. It does not matter whether McCann or former Bears quarterback Jim McMahon are handing them out.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven? column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;
to send him an email.