After years of tinkering with their financial advisors' pay plan to incentivize them to focus on banking and lending - an often unpopular strategy with advisors - the large wirehouses are minimizing or rolling back changes to advisors’ pay grid in 2026.
Merrill Lynch this week announced minimal changes to next year’s plan after the wirehouse made no changes to its 2025 pay plan for financial advisors.
Earlier this month, UBS wealth management in the US backtracked from a 2025 pay reduction in some advisors' overall compensation, announcing internally it would add to some advisors’ pay next year - if they met certain targets.
Today, wirehouse advisers typically take home 35 cents to 45 cents of every dollar of revenue generated from the grid, by far the largest expense at a wirehouse. That means an adviser serving clients with $100 million in assets and bringing in $1 million in revenue would earn between $350,000 and $450,000 a year.
According to a company memo, there will be no alternations next year to Merrill’s grid, the core of an advisor’s compensation. The term 'grid' is industry shorthand for the complex structure of advisers' compensation at large institutions that typically have many parts.
That doesn’t mean Merrill Lynch is taking a complete hands-off approach to advisor pay, goosing advisors to focus on clients or “households” with $1 million or more in assets - a long-term industry trend. To that end, Merrill is chopping the grid rate for households between $250,000 and $500,000 by 20%.
Morgan Stanley this month also bumped up the threshold for accounts considered to be “small households,” from $250,000 to $300,000. That change was introduced for next year’s compensation structure for the wirehouse. The move aligns with the firm’s broader push for advisors to focus on larger, more profitable client relationships.
The last time Merrill Lynch made an adjustment to its small household policy was more than a decade ago, with the average net new Merrill household well over $1 million in assets.
“We’re seeing a clear trend toward larger client relationships with more complex financial needs,” according to the company memo. “This is evident in the average size of a new household at Merrill, which continues to grow each year.”
“The 2026 plan is designed to help us accelerate our momentum in line with responsible growth and our core strategic pillars,” according to the memo. “It will continue to reward you for growing your practices through client acquisition, deepening relationships with your existing ones, and delivering the full breadth of our platform.”
Merrill Lynch is offering two “growth award programs” for advisors, one in banking and another focusing on money market flows and deposits, according to the memo.
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