Merrill Lynch is fine-tuning a new enhanced pay grid that motivates financial advisors to serve high-net-worth clients, work in teams, and hit other goals.  The new enhanced pay grid would become effective next year. 

“Under the enhanced grid proposal, advisors would become eligible for extra pay if they hit four out of five measurable targets.  One is to have a book with at least 80 % of the clients qualifying as “affluent,” which Merrill defines as households with assets of $ 250,000 or greater.  Another goal is having no more than 150 households in the book of business,” according to Kathleen Laverty of FundFire.

Other targets in the plan include having 35% of client assets in fee based accounts, and to maintain a  client retention rate of at least 98 %, and tapping into a certain level of other products and services which may include, retirement planning,  and loans.  Advisors will be recognized for having professional designations such as CFP, Certified Financial Planner.


According to Investment News, MSSB can’t cut costs by lowering broker pay because McCann and Krawcheck are on the prowl for MSSB talent.

According to the article, Brad Hintz, an analyst at Sanford C. Bernstein & Co. said in an interview with Tom Keene on Bloomberg Radio’s Bloomberg Surveillance, that, “Morgan Stanley Chief Executive Officer James Gorman can’t cut expenses at the joint venture with Citigroup Inc.’s Smith Barney as fast as he would like because “he’s being checkmated by Sallie Krawcheck and Bob McCann.””

Hintz also stated, “Investors and analysts have been disappointed by the speed of the Morgan Stanley Smith Barney integration.  The unit posted a pretax margin of 9 percent in 2010, less than half of Gorman’s goal of more than 20 percent.  “Bank of America’s wealth and investment management division, which includes Merrill Lynch brokerage and U.S. Trust, had a margin of about 15 percent.

All of the wirehouses are still competing fiercely with one another to attract top talent.

It’s a good time to be a financial advisor, if you’re considering a transition.