Morgan Stanley has agreed to pay $46 million in cash to settle a gender discrimination class-action lawsuit filed by female financial advisors and trainees employed by its global wealth management group.

District Court Judge Richard Roberts for the District of Columbia agreed to the terms of the settlement, which included increasing female financial advisors' earnings by at least $16 million over the next five years.

The New York-based investment bank is also expected to spend $7.5 million on diversity-related programmes, according to one of the three firms representing the plaintiffs.

The suit was filed on charges of gender discrimination of female financial advisors and registered financial advisor trainees employed by Morgan Stanley's global wealth management group from 5 August 2003 to 30 June 2007.

The settlement also calls for the firm to make changes to its compensation policies and promotions, as well as name two independent outside experts to develop a programme aimed at increasing business opportunities for female financial advisors.

Only last week, Morgan Stanley agreed to settle another class action alleging racial discrimination brought by over 1,000 African-American and Latino brokers in northern California with a $16 million pay-out.

This settlement has not yet been approved by the court.

The firm will also increase diversity and improve anti-discrimination policies and will work with industrial psychologists to develop hiring, retention and development initiatives for African-American and Latino financial advisors and broker trainees.

Its power-ranking system, which grades performance to see who gets the clients of brokers who leave, will also be altered.