Wirehouse grids squeeze low producers

JAN 04, 2009
By  Bloomberg
The lowest-producing brokers at New York-based wirehouses Merrill Lynch & Co. Inc., Morgan Stanley and Smith Barney are likely to see smaller paychecks in 2009. Smith Barney reps doing less than $400,000 in production will see reduced grid payouts of two to four percentage points. Lower producers will feel the pain even more keenly. Brokers at Smith Barney with nine years or more in the industry who produce between $300,000 and $350,000 will get a 30% payout, down from 37%, and those producing between $200,000 and $299,999 will get 20%, down from 25% to 27%. Smith Barney, a unit of Citigroup Inc. of New York, also has instituted a new household minimum of $75,000 for transactional business and $25,000 for advisory accounts. Brokers won't get paid on accounts that don't meet these minimums. At Merrill, brokers with six or more years of service will have to produce $300,000 or more to get on the grid. Reps producing less than that will get a flat 25% payout. Under Merrill's old pay plan, 10-year vets had to produce $200,000. Merrill also flattened its grid so all products pay the same. At Morgan Stanley, brokers with eight or more years of service who produce under $200,000 will begin the year at a 20% payout. These low producers had been getting 25%. Veteran Morgan Stanley reps doing less than $250,000 will get a 25% payout. Meanwhile, Morgan has raised pay for higher producers and successful young brokers. E-mail Dan Jamieson at [email protected].

Latest News

Raymond James continues recruitment run with UBS, Morgan Stanley teams
Raymond James continues recruitment run with UBS, Morgan Stanley teams

A father-son pair has joined the firm's independent arm in Utah, while a quartet of planning advisors strengthen its employee channel in Louisiana.

Social Security trustees see one less year in insolvency countdown, project shortfall to start 2034
Social Security trustees see one less year in insolvency countdown, project shortfall to start 2034

New report shows dimmed outlook for benefits to retirees and disabled Americans, creating further pressure for federal tax hikes or more borrowing.

NY Republican Stefanik presses SEC to probe Harvard bond sale
NY Republican Stefanik presses SEC to probe Harvard bond sale

Open letter to SEC Chair Paul Atkins questions whether the Ivy League university withheld material information prior to its $750 million taxable bond offering.

Ex-LPL leader re-emerges at The Wealth Consulting Group
Ex-LPL leader re-emerges at The Wealth Consulting Group

The Las Vegas-based hybrid RIA overseeing $8.8 billion in assets has named Andy Kalbaugh president to help scale its advisor platform.

Envestnet extends investment offerings with new alts model portfolios
Envestnet extends investment offerings with new alts model portfolios

The wealth tech giant – in collaboration with Fidelity, BlackRock, State Street, and Franklin Templeton – is offering its advisor and wealth firm users more ways to diversify.

SPONSORED RILAs bring stability, growth during volatile markets

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.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave