Morgan Stanley (MS) is emphasizing growth in its private bank operations, and its 2016 compensation plan for the firm’s 15,800-plus advisors reflects this strategy.
“We continue to make private banking services our top strategic priority in support of [our] holistic advice,” Greg Fleming, president of wealth management, said in a memo to advisors last week. “Highly competitive lending solutions have proven popular with clients, and for 2016 we will focus on extending our suite of services to bring clients new convenience and value in their day-to-day cash management.”
In the third quarter, client loans made through Morgan Stanley advisors totaled $61 billion, up 5% from the prior quarter and up 27% from last year. (In the same period, fee-based asset flows declined to $7.7 billion vs. $13.9 billion sequentially but rose from $6.5 billion a year earlier.)
To further boost loans and other banking business, the wealth unit is rolling out a new incentive award. Advisors can receive $5,000 to $50,000 a year for growth in clients who are “cash management engaged.”
To be eligible for this new bonus, advisors must have five new clients with an average daily cash balance of $50,000 or with $5,000 a month in direct deposits. In addition, they need to show aggregate growth in their total cash-deposit balances of $125,000 for 2016.
In addition, these clients must use two out of five bank payment mechanisms (which include debit cards, online bill payment, Morgan Stanley American Express Cards, check writing and ACH transfers).
Clients must meet these standards for three consecutive months in 2016, and advisors must demonstrate that they are broadening their client relationships on the banking side.
Advisors’ support staffers and associates can receive between $1,200 to $12,500 for their efforts to grow bank programs.
As for Morgan Stanley’s lending award, it remains unchanged from last year at the advisor level: A maximum of $202,500 will be received for those showing growth in securities-based lending, tailored lending and home mortgages.