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April 27, 2020 at 09:00 AM
Morgan Stanley CEO James Gorman recovered from COVID-19, according to a Bloomberg report of April 9. The executive, 61, recently told the bank’s employees that he had flu-like symptoms in March and tested positive for COVID-19, but he did not require a hospital stay during the illness; the news was confirmed by a spokesperson.
Morgan Stanley, which has some 15,500 financial advisors, is buying discount broker E-Trade Financial for $13 billion, creating a firm that could have over $3 trillion in client assets. Also, Gorman has told Morgan Stanley’s employees that the bank planned to keep its employees on board throughout the year.
According to Gorman, some 90% of the bank’s employees are working from home due to the coronavirus. “I am incredibly proud of you! Working from home, supporting our clients and this great firm, and helping your families throughout the physical and mental stress,” he said in a memo.
Gorman also said recently that it postponed an important change to its compensation plans, set to start April 1, by six months. Morgan Stanley’s Field Management Head Vince Lumia says the wealth unit knows its advisors “are facing enormous challenges personally and professionally, while at the same time taking great care of your clients in a very difficult environment.”
The change being pushed back to Oct. 1 involves the planned jump in the levels of yearly fees and commissions (or production) under $5 million used as thresholds in the incentive comp grid. The shift generally boosts the production thresholds below $5 million by some 10%.
Changes to start May 1 include one tied to net acquired assets, that lets advisors earn up to 3 percentage points on the credit rate applied to revenue from clients with NAA of $5 million and up. It also uses assets plus liabilities to determine if a household is subject to its small-household policy.
Wells Fargo: Several weeks after it moved to raise the client asset level at which an account fee was waived, Wells Fargo Advisors put that decision on hold. The wirehouse first told its roughly 13,500 employee advisors that — starting Sept. 1 — client households would need assets of $500,000 in their accounts to avoid fees that typically are as high as $300 per year; earlier, the asset level to avoid the charge was $250,000.
However, the bank then chose to suspend the move due to “the current environment and to ensure we are able to best serve our clients.” The news came as Wells Fargo took a number of steps to address client concerns during the coronavirus pandemic. “We will continue to evaluate this fluid situation and take additional action as necessary,” CEO Charlie Scharf said in a statement.
Wells Fargo’s advisor headcount stands at roughly 13,510 vs. about 13,950 a year ago. That’s down some 1,575 (or nearly 10.5%) from Sept. 30, 2016, when the firm had close to 15,085 registered reps and began making headlines for creating millions of fake accounts.
Bank of America-Merrill
BofA recently said that it has no plans to cut any jobs this year, according to CEO Brian Moynihan. “We don’t want our teammates to worry about their jobs during a time like this, and we’ll continue to pay everybody, even those who can’t work from home,” Moynihan said about the coronavirus pandemic on CNBC in late March.
In addition, BofA has added some 2,000 staff members in March and is moving roughly 3,000 employees to its consumer and small-business units in response to the COVID-19 crisis, according to a memo seen by Bloomberg.
Cetera
Cetera Financial Group says it is giving its 7,000-plus advisors a new set of services to help them “navigate the current market disruption.” The services include free on-demand certified financial planners who can step in if an advisor becomes ill or is unable to serve a client during the pandemic, as well as free access to fee-for-service payment technology for 90 days.
Its Advisor Resiliency Pack also gives advisors access to video featuring panels of veteran advisors, fund managers and others who share their best practices for helping clients during difficult markets, as well as information and consulting on the $2 trillion national stimulus plan or Coronavirus Aid, Relief and Economic Security (CARES) Act.
“The impact of the global pandemic has created challenges for advisors and their clients that are unparalleled in our time, combining market volatility with significant and widespread business disruption,” the firm said in a statement. Cetera includes Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions, Cetera Financial Specialists and First Allied Securities broker-dealers. Late last year, the IBD group said it had about $240 billion in client assets.
