Increased Payments to Encourage Cross-Selling and Retain Clients

  • Morgan Stanley increases compensation for advisors making referrals to other segments of the company
  • Referral payouts will increase from 28%-55.5% to 60% on eligible revenue starting July
  • Payouts for all gross revenue generated through referrals to rise to 65% from January 1st
  • Advisors with at least nine years of tenure must produce $360,000 in revenue to avoid reduced grid rate from April 2025 (up from $300,000)
  • Cash management bonus introduced for advisors with qualifying CashPlus accounts
  • Morgan Stanley manages nearly $5.7 trillion in client assets

Morgan Stanley is enhancing its compensation plan to incentivize advisors to refer clients across various segments of the company. Starting next July, advisors will receive a 60% payout on eligible revenue from referrals, up from the current rate of between 28% and 55.5%. From January 1st, all gross revenue generated through referrals will see a 65% payout. The company aims to facilitate partnerships among advisors and maximize client relationships. Additionally, veteran advisors with at least nine years of tenure must produce $360,000 in revenue from April 2025 (up from $300,000) to avoid a reduced grid rate. A cash management bonus will be offered for advisors with qualifying CashPlus accounts from January 1st. Morgan Stanley manages nearly $5.7 trillion in client assets.

Factuality Level: 8
Factuality Justification: The article provides accurate information about changes to Morgan Stanley’s compensation plan for advisors and includes relevant details such as the increase in referral payouts, new thresholds for veteran advisors, and the introduction of a cash management bonus. It also cites the company’s statement from its head of wealth management client segments. However, it lacks some context on the current state of the industry or Morgan Stanley’s competitors, which could make it more informative.
Noise Level: 6
Noise Justification: The article provides relevant information about changes to Morgan Stanley’s advisor compensation plan and incentives for referring clients to other segments of the company, but it lacks a deeper analysis or exploration of the potential consequences or long-term trends in the industry. It also does not offer significant actionable insights or new knowledge beyond the specific changes mentioned.
Public Companies: Morgan Stanley (MS)
Key People: Vince Lumia (head of wealth management client segments)

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Financial Relevance: Yes
Financial Markets Impacted: Yes
Financial Rating Justification: The article discusses changes to Morgan Stanley’s compensation plan for advisors, which can impact how they refer clients to different segments of the company and potentially affect their revenue. This is a financial topic as it pertains to the company’s internal operations and could influence the behavior of advisors, leading to growth in various segments of the firm. Additionally, the article mentions Morgan Stanley’s client assets, which are related to financial markets.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article. The content discusses changes to Morgan Stanley’s compensation plan for advisors and their referral incentives.
Move Size: No market move size mentioned.
Sector: Finance
Direction: Up
Magnitude: Medium
Affected Instruments: Stocks

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