Morgan Stanley Offers High Bonuses to Attract Top Private Client Advisors

Contributing Editor

8 May 2006

Morgan Stanley in the US is offering top financial advisors a bonus of up to 200 per cent of their gross revenue over the last year if they join from competitors, according to a Dow Jones Newswires report. Citing people familiar with the package, the report said Morgan Stanley has offered a combination of upfront cash and additional components over several years based on the potential recruit’s performance. The report added that the move is indicative of the intense competition to attract high-producing private client advisors with large levels of assets. It said UBS is offering similar bonuses and other brokerages may be compelled to make similar offers. Dow Jones gave one example of how the bonuses are working for Morgan Stanley advisors. The brokerage firm could offer up to 100 per cent in upfront money of the brokers’ trailing 12-month production in a five- to seven-year loan bonus agreement. The bonus would be treated as a loan, which will be forgiven after a certain amount of years of loyalty. The rest of the package, which could be up to 100 per cent of the brokers’ trailing 12-month production during the next three to five years, could come in cash or company equity. The report said UBS Wealth Management USA has reportedly started to offer up to 200 per cent for brokers with at least $1 million in production and 10 years' minimum experience.