What You Need to Know
- Morgan Stanley is making a few minimal adjustments to advisor incentives in 2022.
- Starting in July, net acquired asset growth will be based on all client balances.
- Starting in Q3, net acquired assets and AUM from Morgan Stanley clients who also have E-Trade accounts will be included.
Morgan Stanley is keeping the core payout grid for its 16,000 or so advisors and brokers intact for 2022 but making a few adjustments to incentives, according to the new plan that was disclosed internally by the company on Wednesday.
“Consistent with our strategic objectives, the plan is designed to support you as you continue to grow your practices and deepen client relationships,” Vince Lumia, head of field management, told the firm’s advisors and brokers in a memo.
“The minimal updates made to the plan are aligned with our modern wealth strategy and are intended to best position you as your businesses evolve to meet your clients’ unique needs,” he explained.
The firm reiterated that it’s “agnostic” about where assets are held. With that in mind, starting in July, net acquired asset growth will focus on all client balances (net acquired assets plus net new liability growth), it disclosed. Currently, it includes only new money (the equity side of the balance sheet).
In addition, starting in the third quarter, net acquired assets and AUM from Morgan Stanley clients who also have E-Trade accounts will be included as well. (This applies to self-directed accounts where the clients have granted advisor visibility to their E-Trade accounts.) Morgan Stanley acquired E-Trade in 2020.
Meanwhile, after introducing new client engagement criteria required for team compensation in 2021, the company is continuing to build on those client engagement metrics in 2022 by adding a fourth way to qualify, providing more qualification flexibility for teams who are consistently preserving or bringing in new assets and liabilities across their books.