Dec 6 Morgan Stanley will shift the way
advisers in its wealth management business are paid next year,
cutting bonuses tied to the amount of revenue they bring in and
rewarding them instead for growing assets and loans.
Advisers, who learned of the new plan Thursday afternoon,
will also be able to buy discounted Morgan Stanley shares for
the first time, according to details of the plan reviewed by
Among the elements unchanged in the plan is the advisers'
pay-out grid, which is industry parlance for the chart used by
brokerage firms to determine pay. Advisers at Morgan Stanley
receive a percentage of the revenue they generate, with the
percentage amount increasing at certain levels. Some advisers
had expected that Morgan Stanley's profit pressures would lead
it to make cuts to the grid.
Also unchanged was the minimum account size on which the
company's nearly 17,000 advisers can get paid a fee. That was
left at $100,000, well below the minimum size of $250,000 at
rival Merrill Lynch Wealth Management.
Nearly four years into its acquisition of the Smith Barney
brokerage from Citigroup Inc., Morgan Stanley is moving
past the cost-cutting stage and focusing on profit growth. Two
of its key objectives are to grow fee-based accounts and
increase loans to its advisory clients.
The new pay plan is meant to align brokers' pay to these
goals, with a new bonus plan for growing assets and loans, and
give them increased ownership in the company through the
discounted share plan. To offset the cost of these new perks,
the company is cutting its overall revenue bonus by two
Morgan Stanley rival UBS Wealth Management Americas released
its 2013 compensation plan earlier this week, making tweaks to
reward advisers for cross selling, but leaving the pay grid