Morgan Stanley Smith Barney is looking to beef up the number of financial advisors (brokers) they employ. They are offering brokers at other firms up to 330% of their trailing twelve month’s commissions as an inducement to leave and come to MSSB.
Does this sound like its in the best interest of the clients? Let’s say the broker had $500,000 in sales last year – he/she might be offered $1.65 million to move to MSSB and bring their clients with them. Just who is this broker now beholden too? Do you think they might have to tow the party line after such a big bonus? Is this in the best interest of their clients? Of course not, no fiduciary in their right mind would offer such a package and no fiduciary in their right mind would accept.
Its one thing to offer money in a merger of equals to help offset merger costs, its another when you offer an outright bribe.
This is just another in a long string of things brokerage firms (wirehouses) do that are not in their clients best interest. By the way, who do you think will bail out Morgan Stanley when they get to leveraged and blow up….you guessed right, the taxpayer.
Scott Dauenhauer CFP, MSFP, AIF