With other firms rapidly improving their recruitment offers to top candidates, Morgan Stanley is guarding against getting left in the dust.
Industry recruiters say the firm has in recent weeks increased the upfront cash offered to top producers, while adding larger bonuses based on the first two years of production.
The firm would not comment, but several recruiters say Morgan Stanley now offers a combination of cash and stock — a 75/25 split — whereas before it had only offered 50/50, in order to entice candidates. The trend in the industry of late has been towards larger upfront bonuses, with UBS and Merrill Lynch leading the way. Morgan's latest move is a bid to keep pace with those firms.
“The brokerage business is better, and with more money comes more confidence,” says one recruiter. “So now, there's this heightened urgency and competition for good brokers.”
Meanwhile, Morgan has reportedly increased back-end bonuses based on production. Whereas Morgan's previous offer was reportedly one 10 percent bonus based on the best 12 months of the first 14, now Morgan is offering an additional 10 percent bonus based on production between months 15 and 26. The deal reportedly also contains a six-year schedule for the forgiveness of the upfront cash loan that producers receive.
There were rumors that Morgan would even push its offer for very large producers to more than 100 percent in upfront cash and stock. Managers at other firms noted that Morgan had become more aggressive in recent months.
As of Nov. 30, 2003, Morgan Stanley had 11,086 reps, a 12 percent decrease from a year earlier.