PDF If you are a customer of a broker or trainee at Morgan Stanley Smith Barney (MSSB), you may want to consider this bit of news when you feel like you might be pressured to trade a stock or bond or invest in a MSSB owned mutual fund or wrap account product. There are about 250 brokers or trainees who will be laid off. If brokers do not generate enough commissions and fees for the firm, they will be getting pink slips and be escorted out of the office with the proverbial file box. They are now highly motivated to make generate commissions and fees from your account. Whether you make money on those investments is not their problem because they are not your fiduciary. Bank of America Merrill Lynch announce similar plans late in 2010.
NEWS FLASH:
MSSB plans to lay off 200 to 300 low producing financial advisors and advisor trainees.
The move would reduce the MSSB’s advisor head count to about 17,800 at the end of the first quarter, still within the firm’s target range of 17,500 to 18,500. The plans, first reported by Dow Jones, were confirmed by a source familiar with the situation.
Financial advisors possibly affected by the move include those who have been at the firm for more than a year and have less than $75,000 in annual production. Trainees at the firm for six to 36 months with $25,000 or less in annual production could also be targeted. The plan will be enforced on a case-by-case basis, which could mean a reprieve for some showing potential for improvement.
MSSB’s strategy comes after reports late last year that Bank of America Merrill Lynch plans to sever ties with its advisors with ten years or more of experience and less than $250,000 in commissions and fees. Both MSSB and Bank of America Merrill Lynch, two of the largest industry wirehouses, have sought to emphasize their largest producers in their advisor forces as they strive for increased profitability.
