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].

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