While some Morgan Stanley-Smith Barney advisors are being offered retention “awards” in the form of forgivable loans, Wachovia advisors are not set to receive any such financial incentive.
Morgan Stanley and Smith Barney recently provided their advisors with details regarding their joint venture’s retention program. The program “awards” have been offered to about 6,500 of the 20,000 advisors in the joint venture as forgivable loans, according to a spokesperson.
These veteran Morgan Stanley-Smith Barney producers, who must have at least $500,000 in ’08 sales, commissions and fees to be eligible for the program, represent about 80 percent of the combined venture’s total revenue, according to two firms.
Top veteran producers with $1.75 million in yearly sales can receive as much as $1.84 million through the program, while a producer bringing in $500,000 in yearly sales would get about $300,000.
And some newer producers (referred to as “Rising Stars”) stand to gain from about $87,500 to nearly $225,000. News reports have estimated that the retention packages will total $2 billion to $3 billion.
The retention program will be paid to advisors in the form of nine-year “forgivable loans.” Those advisors leaving either firm before the end of the nine-year period, will have to pay back the portion of the “loan” that has not yet matured or been amortized, a representative of Morgan Stanley explains.
For advisors who have been with either Morgan Stanley or Smith Barney for more than seven years, the program will distribute two “installments” as follows: