Morgan Stanley has unveiled significant changes to its 2025 advisor compensation plan, designed to incentivize advisors to collaborate across divisions and refer clients to in-house specialists. As reported by AdvisorHub, the initiative aligns with CEO Ted Pick's vision of creating an "integrated firm" by leveraging its $5.7 trillion retail wealth business to attract institutional clients.
As part of the new plan, advisors who refer clients to specialists—such as those in corporate retirement plans, private wealth management, or Graystone institutional consulting—will be eligible for a higher payout. Beginning in July 2025, they will earn a 60 percent payout on accounts generated through these referrals, compared to the standard rate of 28 percent to 55.5 percent. The payout applies only if the advisor shares at least half of the revenue with the specialist. However, referrals to other services, like stock plan referrals or E-Trade, will not qualify for this higher payout.
Additionally, Morgan Stanley will also boost payouts to 65 percent for revenue generated through referrals to its strategic client management team. This team directs clients to other divisions within the firm, including the investment bank or institutional trading desk, for services like IPOs or mergers and acquisitions.
Starting in July, Morgan Stanley will also introduce a cash management bonus for advisors who generate revenue from certain clients with CashPlus accounts. Other adjustments to the compensation plan include expanded exemptions from penalties for small household accounts and providing more flexibility for advisors when discounting securities-backed loans.
To drive higher productivity, the firm will raise the annual revenue hurdle for experienced advisors from $300,000 to $360,000, effective April 2025. Advisors failing to meet the threshold will receive a reduced payout of 20 percent. However, this change will not affect advisors who work in teams.
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