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

Treasury unveils Trump Accounts fund lineup with BlackRock, Vanguard
Treasury unveils Trump Accounts fund lineup with BlackRock, Vanguard

Five index ETFs, including two from State Street, to anchor Trump Accounts as advisors weigh options against 529 and UTMA plans for clients

House panel unanimously advances advisor compensation reform bill
House panel unanimously advances advisor compensation reform bill

A bipartisan proposal aimed at aligning advisor compensation rules with modern business structures is headed to the full House.

Vanilla, WealthFeed land new RIA partnerships
Vanilla, WealthFeed land new RIA partnerships

Vanilla is extending its estate planning tech to Callan Family Office's ultra-high-net-worth business, while WealthFeed's organic growth engine will now be available to roughly 100 advisors at The Mather Group.

As Trump Accounts prep for July 4 launch, Franklin Templeton plans $1,000 match
As Trump Accounts prep for July 4 launch, Franklin Templeton plans $1,000 match

“We are helping families take an important first step toward building a financial foundation for the next generation,” said Franklin Templeton CEO Jenny Johnson

Savant Wealth Management enters Maine with latest acquisition
Savant Wealth Management enters Maine with latest acquisition

Richard Brothers Financial Advisors joins the fee-only RIA, adding its first Maine office and $240 million in client assets

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income

SPONSORED Why direct indexing stopped being optional

Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.