Morgan Stanley today denied a Fox Business report from Wednesday claiming that the wirehouse was considering an independent model for its reps and advisers, all of whom are currently employees.
According to the report, Morgan Stanley was "said to be discussing a plan that would turn many of its brokers into independent contractors with an affiliation with the firm in order to handle investments of its retail, or small investor, clients."
The news story cited unnamed senior brokers at the bank as sources.
Morgan Stanley shot down the notion that it was changing how it worked with its advisers. "We have absolutely no plans to change the employment classification of our financial advisers," a company spokesperson said.
Morgan Stanley's 16,000 reps and advisers are employees of the firm, whereas registered investment advisers working with a custodian own their businesses or are paid as independent contractors. While advisers at big banks like Morgan Stanley are paid a smaller percentage of revenue (about half) than so-called independent advisers, they typically have wealthier clients and generate substantially more revenue.
Morgan Stanley, however, appears to be considering less of a real estate “footprint” in urban money centers like New York and Hong Kong in the future as the vast majority of employees, including financial advisers, work from home during the COVID-19 pandemic. Spending on offices for employees is one of the largest costs for banks and brokers like Morgan Stanley.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
