Dear Mr. Berko:

G.S., Ann Arbor, Mich.

Dear G.S.:

Merrill Lynch is a Big Box Broker, and if your “customer’s man” is a creative, knowledgeable and talented professional with good ideas, he may find that working at Merrill Lynch is like wearing a hair shirt. Merrill Lynch does not endorse individuality, new ideas or innovation, and its brokers are expected to toe the Merrill Lynch line. And Merrill’s stifling, time-consuming, frustrating, dot-by-dot bureaucracy is legendary. The procedures, paperwork and time required to change a client’s mailing address, to make an interest rate adjustment on a margin balance or to change a beneficiary on an IRA could drive a teetotaler to drink.

Merrill’s retail sales force (among the few who still wear ties to the office) is composed of trained robots. Its branch managers require brokers: to make a specific number of cold calls, to open a specific number of new accounts each quarter, to generate a specific amount of commission dollars every quarter, to sell specific Merrill Lynch proprietary products every quarter, to recommend primarily Merrill Lynch research, etc. I don’t know bupkis about your old broker, but if you have enjoyed a good and profitable relationship with him, then I suggest you follow.

Scores of Merrill Lynch brokers are leaving the firm to join smaller money-management brokerages where they believe they can be more effective in managing their client’s money without the onerous, time-consuming layers of “hassle and rassle” to wire a client’s funds to his or her bank account or get permission from New York to recommend an issue that is not on Merrill’s approved list. Still, Merrill is a great company for lots of brokers and clients. Clients seldom get burned or churned by greedy brokers, Merrill has good statements, and the local branches hire good staff people.

Federal Agricultural Mortgage Corp. (AGM-$21.69), also known as Farmer Mac, is an unlikely and unattractive speculation. AGM is a consumer finance company that provides agricultural real estate and rural housing loans in the secondary market in the United States. In fact, some folks mistakenly believe its name implies a relationship to several notorious and larger federal organizations. AGM buys agricultural mortgages from lenders and guarantees payment on securities that consist of pools of loans.

AGM has a huge cash position of $1.4 billion with 10 million shares outstanding. The stock is recommended by several brokerages that believe that declining credit costs along with lower loan-loss provisions and higher volume will generate strong earnings for 2012. And though they might be right, I think their enthusiasm may be offset by increasing regulatory costs, enormous competition in the loan business, the uncertainty surrounding Freddie Mac and Fannie Mae, and a persistently low interest rate environment.

Finally, the low interest rate environment has not given a boost to the real estate market, suggesting that AGM’s revenues may not provide high enough earnings in the next two years to push this issue much above the current price. I wouldn’t buy it. Meanwhile, why don’t you ask your old broker what he thinks of this issue? I’m sure he would welcome your call.