NEW YORK: Wary of brokers who make their money by “riding the calendar” of new stock and bond issues rather than patiently building the firm’s wealth management business, Morgan Stanley is cracking down where it hurts the most: compensation.
Since April 1, Morgan Stanley Wealth Management financial advisers have seen their compensation cut by as much as 50% on sales of new issues to clients who use the firm primarily to get allocations of those securities. The severity of the pay cut varies, but some top earners are seeing payouts cut by half. The new system applies when more than 70% of the business from a client comes from those deals.
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