BofA's U.S. Trust adding "garden leave" for some

CHARLOTTE, North Carolina (Reuters) - Bank of America Corp intends to retain more of its advisers for the ultra-rich through a tougher, extended "garden leave" policy, according to industry recruiters.

Under the latest provisions, certain advisers, portfolio managers and other employees at BofA's U.S. Trust unit who wish to resign cannot solicit clients for 180 days, roughly six months, and must remain at the company for 60 days after giving notice.

Previously, some employees could give as little as two weeks notice.

Wall Street firms, to protect themselves, have long required that departing executives spend two to three months on leave, presumably not soliciting clients or building a competing practice. Recruiters say it is unusual for such a leave policy to be applied to financial advisers.

The new BofA policy change comes less than two months after Michael Brown, one of U.S. Trust's largest advisers, left in December to join Dynasty Financial Partners, a wealth-advisor services firm started by former Citigroup Chief Financial Officer Todd Thomson.

Brown managed nearly $6 billion in client assets for U.S. Trust.

In December, the bank sued Brown and other employees who left with him, alleging they improperly took customer data. That suit was settled in January for undisclosed

terms.

Bank of America spokesman Susan Thomson said the "garden leave" policy was not new, but was an existing program that was expanded to cover more employees. The changes affect U.S. Trust employees and do not affect Merrill Lynch brokers.

Recruiters said the move is aimed at stemming defections from the private bank, which Bank of America acquired from Charles Schwab Corp in 2006. There has also been concern about overlap between U.S. Trust and the ultra-wealthy advisory business under Merrill Lynch.

"It's a scare tactic," said Mindy Diamond, whose Chester, New Jersey-based Diamond Consultants recruits brokers.

"There are an awful lot of legacy U.S. Trust advisers on the prowl, exploring their options, just as advisers at every firm are exploring their options," she said.

(Reporting by Joe Rauch; Additional reporting by Joe Giannone in New York; Editing by Tim Dobbyn)

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