Morgan Stanley, Wells Fargo, and Merrill Lynch have each announced their 2025 compensation plans, becoming the first major firms to do so, with others expected to follow soon. According to reporting on AdvisorHub, these early announcements shed light on how the industry’s biggest players are shaping their pay structures to balance growth incentives with advisor retention in a competitive landscape.
Morgan Stanley is taking a proactive approach by offering higher payouts for brokers who refer clients to other divisions. This is part of CEO Ted Pick’s broader strategy to create an “integrated firm” by leveraging its $5.7 trillion wealth management business to attract new institutional clients. Advisors referring clients to divisions such as retirement planning, institutional consulting, or ultra-high net worth services will see their payout increase to 60% of revenue generated from those referrals. Morgan Stanley is also boosting payouts to 65% for brokers who refer clients to its investment bank or other units, encouraging broader collaboration within the firm.
Wells Fargo, meanwhile, is focused on stability but is raising its thresholds for advisors working with smaller accounts. Advisors handling accounts below $250,000 will see lower payouts, and the bar to avoid the “penalty box” for low producers is increasing to $330,000 in annual revenue. However, Wells Fargo is rewarding advisors who bring in new business, including a $500 bonus for clients who open checking accounts. These moves reflect the firm’s push for higher-value client relationships while still offering growth incentives.
Merrill Lynch is taking a different route by maintaining its 2025 compensation plan with no changes, marking the second consecutive year of consistency. According to AdvisorHub, Merrill is keeping its core cash payout grid and bonuses unchanged, aiming to provide stability to its advisors. This decision comes after a strong year, with nearly 80% of Merrill’s advisors achieving record revenue growth.
As these changes roll out, many advisors may find themselves reassessing their positions, especially if they are negatively impacted by rising hurdles or reduced payouts on smaller accounts. If you’re an advisor facing these challenges, now might be the time to explore your options. With 2024 still open for transitions, there’s an opportunity to consider making a move before the 2025 comp plans fully take effect.
Working with a transition consultant like 3xEquity can provide invaluable guidance as you navigate the complexities of compensation changes. 3xEquity specializes in helping financial advisors evaluate their options and find the best fit for their practice. They offer detailed comparisons of compensation structures across firms, helping you understand how your earnings and growth potential might evolve under different scenarios.
A transition consultant can break down all aspects of potential deals, from signing bonuses to payout grids, and support you through every step of the transition process. If you’re wondering whether the grass is greener at another firm, 3xEquity can help you confidently assess your options and make a seamless move. Their expertise ensures that any transition protects your current business while positioning you for future success.
