Wirehouse grids squeeze low producers

JAN 04, 2009
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

Carnegie Investment Counsel sued over valuation suppression
Carnegie Investment Counsel sued over valuation suppression

Retiring RIA seller David Laidlaw alleges the Carnegie valued his stake on $11.7 million EBITA while pitching potential buyers on $21.3 million.

Arch pushes AI portfolio monitoring into pre-investment due diligence
Arch pushes AI portfolio monitoring into pre-investment due diligence

New tool gives RIAs and family offices AI help vetting private market deals, with some users reportedly halving review time.

$4.5M raised on trust alone: SEC alleges affinity fraud in merchant lending
$4.5M raised on trust alone: SEC alleges affinity fraud in merchant lending

Investors got projected returns dressed up as real ones, SEC says

Treasury sets auto-enrollment rules for Trump Accounts, potentially adding 60 million more children
Treasury sets auto-enrollment rules for Trump Accounts, potentially adding 60 million more children

Parents must still act to get the $1,000 federal seed and employer contributions, giving financial advisors a role in the rollout.

FINRA bars former LPL broker for stealing $1.7 million from customers
FINRA bars former LPL broker for stealing $1.7 million from customers

FINRA booted Rudy Anguiano from the industry for “conversion - the intentional and unauthorized taking of another person’s property.”

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains