Deferred Compensation Is the New Black For Wirehouses Payment Grid

Posted on February 18th, 2015 at 10:30 AM
Deferred Compensation Is the New Black For Wirehouses Payment Grid

From the Desk of Jim Eccleston at Eccleston Law Offices:

Many wirehouses have deferred compensations for their advisors. Even though the whole grids were largely left intact, compensation is inarguably more back loaded, and therefore somewhat less valuable.

UBS ended its 3% bonus on fee-based business and substituted it with a more broadly based Wealth Management Award that offers advisors the potential to earn a 6% bonus, but that will be deferred for six years.

Morgan Stanley increased the deferred percentage of payouts by 1.5% to 2% for most advisors vesting in four years for the stock component and eight years for the cash portion.

Firms are aware that in the short-term they may lose some advisors, but in long term, firms are betting that their deferred compensation dollars will convince more advisors to stay with the home team. However, given the levels of upfront bonuses offered by rival firms, it’s hard to see how these new programs will make much of a difference in stemming defections.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

Tags: wirehouses, UBS, investment, advisor compensation

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