Morgan Stanley is promoting its fee-based brokerage account by offering 50% payouts for one year.
The promotion, called “Success by Choice,” began in July and is scheduled to run for five months through November. Brokers will get the special payout for a period of 12 months, starting when the account is opened, a Morgan Stanley spokesperson confirms.
The firm is also promoting the Choice accounts to consumers by offering a financial plan and a platinum MasterCard at no additional cost for accounts opened by Nov. 30.
But some question the value of the promotion.
“If clients are doing a lot of trading, the [Choice] account might be to a client's advantage,” says a Morgan Stanley broker. But clients aren't much interested in trading right now, the rep adds.
“A year-and-a-half ago, when commissions were easy to come by, there was relatively little incentive” to sell fee-based accounts, says Mark Constant, a senior research analyst at Lehman Bros. in San Francisco. Now fee business looks more attractive even without incentives, he says.
Morgan Stanley does not separately report assets in its Choice accounts, so it's unknown how well the promotion is working.
Prudential Securities and Merrill Lynch also have payout incentives for fee business. Since last year, Prudential Securities has paid out 50% on a variety of fee accounts, including its Prudential Advisor brokerage account.
Merrill Lynch instituted a five-percentage-point bonus payout on fee accounts and other “annuitized” business last May, which was due to end last month. The firm has said it may make those higher payouts permanent.