Half time at Morgan Stanley

Sounds like their considering some comp. changes as well.  I’m sure they will do something to increase payouts for the top 10-20% of brokers and $1million and above teams.  I could see them increasing the penalty box limits too.  We’ll probably find out before too long.

[quote=MWD123]Sounds like their considering some comp. changes as well.  I'm sure they will do something to increase payouts for the top 10-20% of brokers and $1million and above teams.  I could see them increasing the penalty box limits too.  We'll probably find out before too long.[/quote]

I would love for them to address the issue of Team Compensation.  They've been talking about it for years, but since Gorman seems to really be promoting teambuilding, I'm hoping comp changes come soon with that.

Does MS consider team production the same as individual production?

For instance, Is a 3 person team doing $600k considered one producer, or it it 3 $200k producers?

No, MS does not consider team production the same as individual production.  In your example, it would show as 3 separate produces doing $X dependiong on their split agreement.  I think that this will change as MS goes toward verticle teams.  From what I’ve heard the verticle team structure is common at ML.

my feeling is anyone under 300k will have penalty box

[quote=frumhere]my feeling is anyone under 300k will have penalty box[/quote]

With certain LOS criteria. ie. 5 yrs. $250k 8 yrs. $300k 10 yrs. ?

not sure, but i think it will get ugly soon

[quote=frumhere]

not sure, but i think it will get ugly soon

i think the ugliness is over.  when they do the new comp grids, that’s when it will get really ugly. 

where is mike butler when i need him?

I was wondering that too…he is not to bright, but I find his blind commentary funny

I sure you will show up now that you presence has been asked for Butler…so let me ask you what you think about the brokerage settlements for registrations, SA’s, errors, O/T etc…How do you think this will play out over the next year or two?

[quote=fritz]I was wondering that too…he is not to bright, but I find his blind commentary funny[/quote]

You may not think Mike is bright, but I bet he knows the proper ways to use “to” and “too”!

What was that old saying about glass houses…

[quote=fritz]I was wondering that too...he is not to bright, but I find his blind commentary funny[/quote]

That's fine, because I find your relentless negativity and rumor mongering to be pretty humorous. It always reminds me of the two losers in Glengarry Glen Ross.

[quote=MWD123]

[quote=frumhere]my feeling is anyone under 300k will have penalty box[/quote]

With certain LOS criteria. ie. 5 yrs. $250k 8 yrs. $300k 10 yrs. ?

[/quote]

I wouldn't be surpirsed to see the penalty box expanded, but not as much as suggested above. I think it now only applies to >LOS8 <$200k. It would be interesting to see what level it's at at other wirehouses.

[quote=frumhere]

not sure, but i think it will get ugly soon

[/quote]

What is it that gives you the negative vibes? I’m not arguing, just curious.

[quote=mikebutler222][quote=MWD123]

[quote=frumhere]my feeling is anyone under 300k will have penalty box[/quote]

With certain LOS criteria. ie. 5 yrs. $250k 8 yrs. $300k 10 yrs. ?

[/quote]

I wouldn't be surpirsed to see the penalty box expanded, but not as much as suggested above. I think it now only applies to >LOS8 <$200k. It would be interesting to see what level it's at at other wirehouses.

they are going to be changing syndicate rules soon and i think it is the beginning of blue/gold/platinum reps.

[quote=frumhere]they are going to be changing syndicate rules soon and i think it is the beginning of blue/gold/platinum reps.[/quote]

There's always been a pecking order in syndicate, nothing new there. What's with the blue/gold/platinum reps stuff? Is that from Gorman's ML days?

no…all ms accounts are classified as such so why shold reps be any different?

[quote=frumhere]no...all ms accounts are classified as such so why shold reps be any different?[/quote]

Huh? How are those two things similar?<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Households are classified as such to give special bennies to folks with more assets with us. I suppose they could do the same to reps, though there’s already some of that already going on with the special bennies some club levels get with admin support.

What makes you think they’ll go that route further? You sound pretty disillusioned. Weren’t you considering management? Does that have anything to do with your current mood?

[quote=fritz]I sure you will show up now that you presence has been asked for Butler...so let me ask you what you think about the brokerage settlements for registrations, SA's, errors, O/T etc...How do you think this will play out over the next year or two?[/quote]

I'm not sure what you mean. What do you mean by "brokerage settlements" and why are you so certain the sky's falling?

I was considering mgt, but decided that the best insurance is a book not a monthly check, although consistant in payment.

[quote=frumhere]I was considering mgt, but decided that the best insurance is a book not a monthly check, although consistant in payment.[/quote]

I couldn't agree more. A book is a lifeboat, a mgt position is anything but, and lately it's been a bad place to be.

i am just nervous b/c i am los 5 and trail 250 and i feel i could get slammed if they make changes

[quote=frumhere]i am just nervous b/c i am los 5 and trail 250 and i feel i could get slammed if they make changes[/quote]

I don't know that there's anything to be gained by worrying about it. It will happen or not happen no matter how you worry or don't worry about it. I doubt there will be  more cuts, especially at your LOS. OTOH, you should always have a lifeboat handy. T

he best advice I think you can get is to just grow your biz, have an escape handy just in case and don't be distracted by what's happening in mgt corner offices.

That’s why I have been talking to ML and SSB.  They seem interested…it would make sense that MS would be interested in keeping me, but you never know.

My los is 3.5 and T12 $200K. A little worried, but not in panic mode. I think before they change the grid they will encourage us to team up. Either that, or we should think about doing it now. I’ve talked to SB and ML as well, but we can’t compare MS to them because our margins are so much lower. Gorman is going to do whatever it takes to increase the margin. I don’t think getting rid of promising young producers is smart, but I also didn’t think hiring 2400 trainees a year was good business either. I hope we’re okay, but I agree with you guys. It can’t hurt to have a plan B.    

I agree, you just never know what the hell firms are thinking.

You guys should both be fine.  If they cut at those production levels for your respective LOS, the firm would be up $#it creek.

[quote=fired?] I've talked to SB and ML as well, but we can't compare MS to them because our margins are so much lower.  [/quote]

You mean ave production per broker? Gorman has a slide that says post last year's cut we've move to a tie for 2nd on that category with (I believe) SB. I agree he won't be statisfied with 2nd, but we no longer trail everyone by miles.

Team Up?  Most people I know looking to go into teams do it for convenience (vacation, coverage, etc )and not to make 1+1=5.

Gorman mentioned in a few of the townhall’s that he believes teams are the future of the business. He seems to feel that there is too much for one person to master on their own. Thinking about teaming up prior to being forced to may help one find the right partner.



Butler, I didn’t mean avg. production. I was referring to the profit before tax margin which is 8% for MS versus 19-21% for SB and ML. Gorman seemed intent on narrowing this gap at the UBS Financial services conference.



The fact with Gorman is, he wants advisors to grow their revenues to a million plus. I guess we can’t sit back until we get there.   

The wirehouses want teams to make the assets “stickier”. It is harder to move a team, and more difficult to for one broker to leave and take his/her accounts when someone else has a relationship with them.  More vacations and free time is how they sell it to the brokers.

Yeah downtown. Teams never leave…

[quote=fired?]Yeah downtown. Teams never leave...[/quote]

They do, but they don't seem to be as mobile as individuals. I think there IS something to the "sticker" logic, as well as the need to increase assets.

[quote=fired?]

The fact with Gorman is, he wants advisors to grow their revenues to a million plus. I guess we can't sit back until we get there.   [/quote]

Well, don't we all want to be over $1MM?

Don't leave out the "ultimately" that he said before that figure and the average of $700k he had on his slide (from today’s $520K average) as an "aspiration" figure.

Teams are stickier, but they also tend to have more wealthy clients, and better relationships with them. Therefore the move is actually easier with a team. However, I do think it is more difficult to motivate a team to move in comparison to an individual.



I agree with your assessment of $700K. It probably takes an advisor between 10-15 years to get to the $500-700 level. As long as lower LOS producers are growing their revenues at a reasonable pace we should be okay.



Butler what do you think?

…butler e-mailed me…he concurs!  

Thinking about teaming up prior to being forced to may help one find the right partner. 

We'll never be "forced" into partnerships.  They will, however, make it financially rewarding to be in a partnership.  Management knows that the best motivation for us is the almighty $.  Sometimes these financial incentives are only temporary. 

[quote=frumhere]...butler e-mailed me...he concurs!   [/quote]

Huh?

only a joke butler…

It is interesting, in any case, that Gorman would set a goal, even if it’s a number of years out on the horizon, of $1 million in production per advisor. Smith Barney had set the very same goal for its advisors under Sally Krawcheck, and then decided to back away from it.

[quote=broker-editor]It is interesting, in any case, that Gorman would set a goal, even if it's a number of years out on the horizon, of $1 million in production per advisor. Smith Barney had set the very same goal for its advisors under Sally Krawcheck, and then decided to back away from it. [/quote]

He didn't really "set a goal" of a million.  His chart at a town hall meeting said "aspirations" and had $700k average figure (current average is about $520k) for a few years down the road. He then tossed off something like "I'd like to see the average above $1MM".

Suddenly that comment is being taken as a "goal" and recruiters are using that as a "Gorman says everyone has to be above a million, so you'd better get backing and take the offer I brought you" scare line. It's really pretty funny....

I certainly don't want to be accused of rumor or fear mongering, but I don't think it's so outrageous to posit that Gorman probably does have a goal of getting to $1 million per producer. I have my doubts that Gorman ever just tosses something off when he's talking to brokers. I think he's too smart for that. Aspirations is the same as goals. Of course that doesn't mean he's going to fire everyone who falls below that. He probably has a strategy for getting there. But it's still ambitious.

aspirations “are” the same as goals.

[quote=broker-editor]<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

I certainly don't want to be accused of rumor or fear mongering, but I don't think it's so outrageous to posit that Gorman probably does have a goal of getting to $1 million per producer.

[/quote]

Believe me, I'm not calling you either of those things, but I assume you mean $1 million AVERAGE per producer, right? Let's not forget he said $700k in his slide, and that was in 3 years+.

The problem is this gets translated to "every broker above" from average and the "in 3 yrs+" gets lost in the shuffle. Suddenly it's  "Gorman said every broker needs to get over $1 million".

Having said that, a $1 million average isn’t a nutso goal (see the details below) and I’d be surprised if every wirehouse boss doesn’t see it as a goal in some timeframe.

[quote=broker-editor]

I have my doubts that Gorman ever just tosses something off when he's talking to brokers. I think he's too smart for that.

[/quote]

Maybe you should have seen the meeting.  <?:namespace prefix = v ns = "urn:schemas-microsoft-com:vml" /> 

[quote=broker-editor]

Aspirations is the same as goals. Of course that doesn't mean he's going to fire everyone who falls below that. He probably has a strategy for getting there. But it's still ambitious.

[/quote]

I wouldn't say goals are the same as aspirations (and I think he didn't use "goal" for a reason in his slide), failing to meet goals can have serious consequences, failing to meet aspirations, well, not so much.

OTOH, I agree those numbers are ambitious, depending on how long you grant to attain them. Getting to $700k in three years from today requires, what, just over 11% growth? Big, but not scary big. Getting to $1million at the same pace takes three more years. If you up the pace to 15%, you’ve hit it in five years from today.

good points all. well taken.

Butler, to answer your previous question about what I mean about the firms possible being at a crossroads because of the overtime, work expenses, error account, registrations…I work in CA and have about 15,000 coming from the lawsuit settlements made earlier this year…The attorney who is winning these suits has told be that within 2/3 years the business will be completely different than now in terms of compensation in CA and some other states…workers have to have a salary in CA going forward or they (firms) will just get sued again.  Salary and sharply reduced payout looks likely…do you have any knowledge about the issue?

[quote=fritz]Butler, to answer your previous question about what I mean about the firms possible being at a crossroads because of the overtime, work expenses, error account, registrations...I work in CA and have about 15,000 coming from the lawsuit settlements made earlier this year...The attorney who is winning these suits has told be that within 2/3 years the business will be completely different than now in terms of compensation in CA and some other states...workers have to have a salary in CA going forward or they (firms) will just get sued again.  Salary and sharply reduced payout looks likely...do you have any knowledge about the issue?[/quote]

Did the overtime suits cover anyone other than trainees? Did it cover things like errors, registration and work expenses? I haven't been watching the detils for two reasons; 1) I think the lawsuit is a crock 2) It doesn't affect me at all.

But to answer your question, I haven't heard any discussion about the effects on the lawsuits on the rest of the biz.

But, it does seem logical that if the biz were to be ruined it would be by lawyers who file class action suits, give the "victims" pennies on the dollar and end up walking away with more money than God has....

How much are they raising the bar for Presidents Club / Directors ?

I hear that they also asked brokers to voluntarily give up accounts under $100,000 recently?

[quote=broker-editor]

How much are they raising the bar for Presidents Club / Directors ?

I hear that they also asked brokers to voluntarily give up accounts under $100,000 recently?

[/quote]

Don't know about # 1, on #2 I haven't seen anything like that.

I hear their maybe different solutions for different reps- some may get
salary, some stay administrativley exempt (granted they get the min.
$455 per week income), and others exempt through the “highly
compensated” exemption.

This could mean the guy next to you is getting paid by the hour and leaving at 5pm.