Morgan Stanley's Strategic Shift - Elevating Grid Hurdles, Trimming Compensation for Small Households

Posted on November 2nd, 2023 at 11:29 AM
Morgan Stanley's Strategic Shift - Elevating Grid Hurdles, Trimming Compensation for Small Households

From the desk of Jim Eccleston at Eccleston Law 

Morgan Stanley Wealth Management has informed its approximately 15,000 advisors that, to maintain their current payout in the upcoming year, many will need to increase their revenue, according to a recent article in AdvisorHub.

The 2024 pay plan for the firm will raise the production requirements on advisors' core compensation grid by approximately 10 percent starting in January. Payouts will still vary between 28 percent and 55.5 percent of the fees and commissions generated by brokers, depending on their placement within the 16 revenue bands. AdvisorHub reports that this adjustment for 2024 will impact approximately one-third of the firm's sales force.

Additionally, Morgan Stanley intends to alter its small household policy. The changes include the elimination of payouts for households under $250,000 in assets unless the accounts qualify for a growth exemption. Effective January, brokers will receive no credit for households that do not grow by at least 5 percent and have $25,000 in net new assets or liabilities.

To mitigate the impact of compensation changes, Morgan Stanley will implement a 10 percent increase in brokers' firm-funded Business Plan development expense account budgets.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

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