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Welcome back to AdvisorTrends, the podcast where we break down the latest developments in the financial industry to help you make informed decisions. I’m your host, and today, we’re diving into the 2025 compensation plans just released by three of the industry’s biggest players: Morgan Stanley, Wells Fargo, and Merrill Lynch. These firms are the first out of the box to unveil their new comp plans, with others expected to follow suit. We'll take a look at what’s changing, how it could impact you, and whether now might be the right time to consider making a move.
Let’s start with Morgan Stanley. According to reporting on AdvisorHub, Morgan Stanley is sweetening the pot for advisors who refer clients to other divisions within the firm. This is part of CEO Ted Pick’s goal to build a more "integrated firm" that leverages its massive $5.7 trillion-asset wealth management business.
What does that mean for you, the advisor? Starting in 2025, if you refer clients to specialists in retirement planning, ultra-high net worth advising, or other divisions, you’ll receive a 60% payout on revenue generated from those accounts. That’s a big bump from the standard grid rate of between 28% and 55.5%. Morgan Stanley is also increasing payouts to 65% if you refer clients to its investment bank or other units, making collaboration within the firm more lucrative than ever.
Now, on to Wells Fargo. They’re taking a steady approach with minimal changes, but there are some adjustments advisors should be aware of. Wells Fargo is keeping its core comp structure the same but raising the bar for smaller accounts and low-producing advisors.
Advisors handling accounts under $250,000 will now see reduced payouts—part of Wells Fargo’s ongoing strategy to encourage advisors to focus on higher-value clients. The minimum production level to avoid the “penalty box” is also increasing to $330,000 annually. But here’s the silver lining: Wells Fargo is offering a $500 bonus for every client who opens a checking account, rewarding advisors who help grow their banking relationships.
And then there’s Merrill Lynch. Unlike its competitors, Merrill is keeping its 2025 compensation plan unchanged for the second consecutive year. According to AdvisorHub, Merrill’s Co-Head Eric Schimpf said the firm is focused on providing consistency and stability to its advisors. The core cash payout grid and bonuses will remain the same, which is good news for those who prefer predictability in their earnings. After a strong year of growth—nearly 80% of Merrill’s advisors had record revenue—sticking with the same comp plan makes sense for many within the firm.
Now, let’s talk about what this means for you as an advisor. If you find yourself negatively impacted by any of these changes—whether it’s higher hurdles, lower payouts for smaller accounts, or even just a lack of growth incentives—you might be wondering if now is the time to make a move.
With 2024 still open, there’s definitely time to consider your options and make a transition before the new comp plans take full effect. And here’s where a transition consultant like 3xEquity can be a game-changer.
Working with a consultant like 3xEquity can provide you with invaluable insights into how these compensation changes will impact your earnings and growth potential. 3xEquity specializes in helping financial advisors find the best fit for their practice by offering detailed comparisons of compensation structures across firms. They can help you assess whether the grass is greener elsewhere and guide you through the entire transition process.
Whether it’s understanding the fine print of signing bonuses or negotiating the best deal for your book of business, 3xEquity can help you make a smooth, informed transition. If you’re thinking about making a move, now could be the perfect time to explore your options, before 2025 rolls in with its new comp plans.
