Tracking 2024 Comp Plan Reveals (Pt 1)

The mostly sideways financial markets this year have left many advisors wondering what their comp plans are going to look like in 2024.

Now, they have a much clearer idea.

Over the last week, AdvisorHub has shared news from Morgan Stanley, J.P. Morgan Advisors, and Merrill Lynch, all of which gives advisors more intel about what to expect if they are considering a change.

Morgan Stanley Wealth Management recently told its approximately 15,000 brokers that they have work to do, if they want to maintain their current compensation. Specifically, Morgan is raising the production hurdles on brokers’ core compensation grid by around 10% starting in January, according to AdvisorHub.

Then there’s J.P. Morgan Advisors, which revealed that it is “tweaking its compensation plan next year to raise the bar for lower producers while keeping high-end brokers, including those added through the acquisition of First Republic Bank in May, in their seats,” according to the publication. Starting January 1, J.P. Morgan will raise the hurdles in the firm’s core payout grid for brokers that generate less than $2 million in annual revenue, Phil Sieg, CEO of the brokerage unit, told AdvisorHub.

Merrill Lynch, meanwhile, “sent a signal” last week that it is “listening to (its) sales force and are rolling back two controversial pay policies as part of its 2024 brokerage compensation plan.”

The big one, according to the publication, is that Merrill “is eliminating a five-year-old growth grid, which had offered a reward for brokers adding clients and accounts but included yearly penalties for those who did not grow. The program had boosted client assets flows and household growth, but some defectors complained that the mandates distracted them from working with their existing customers.”

Chris Stacey, the COO of 3XEquity, the industry leader in facilitating career transitions within the wealth management space, was hardly surprised by the revelations.

“Brokerages are hurting as they scramble for positive returns, and cash sits on the sidelines,” said Stacey. “This has created volatility in terms of advisors are going to be compensated. If you have been on the fence about change, now may be a good time to consider it, since some firms will value their work force, while others take them for granted.

“We’re following these trends and are ready to help you identify your best options.”

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