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Morgan Stanley, which has more than 15,000 brokers, will
"significantly reduce experienced adviser recruiting," according
to a staff memo from Morgan Stanley co-heads Shelley O'Connor
and Andy Saperstein that was viewed by Reuters. The news was
reported earlier on Tuesday by the Wall Street Journal.
Merrill Lynch announced that, starting in June, it will no
longer offer new prospects or recruits big upfront bonus checks
to join its firm, a common and costly industry practice.
For years, brokerage executives have complained about the
ceaseless competition among Wall Street firms to offer ever more
lucrative recruitment packages to gain top advisers and their
clients and assets.
The offers included a substantial sign-on check, plus a l bonus
paid out over seven to 10 years based on sales and growth
targets. They were used as the primary way to expand wealth
management businesses, but critics said recruitment costs often
outweighed returns.
Morgan Stanley will honor any approved recruitment offers made
and in the "pipeline" by June 16 for brokers who are set to join
the firm on or before Sept. 1, according to the memo.
The company will announce a new recruitment policy in the coming
weeks, it said.
UBS AG's <UBSG.S> Wealth Management Americas last year announced
plans to curb recruiting.
(Reporting By Elizabeth Dilts; Editing by Steve Orlofsky)
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