Morgan Stanley gets aggressive in luring brokers

Morgan Stanley's brokerage unit is getting more aggressive in trying to lure financial advisers as the wider retail brokerage job market heats up.

Morgan Stanley acquired most of Citigroup Incorporation's Smith Barney in the spring, a deal that had been touted as boosting the company's number of financial advisers to more than 20,000.

In June, the company lowered its forecast for how many financial advisers would staff the joint venture to 18,500. That number dropped to 18,160 by the time Morgan Stanley Smith Barney reported results in October.

Morgan Stanley Smith Barney is still the largest US retail brokerage by number of financial advisers.

As it seeks to recruit more advisers, the firm began offering top performing brokers at rival firms as much as 330% of their annual fees and commissions over five years if they join the newly combined firm, according to head hunters. Second-level brokers could earn as much as 280%.

"They're very ambitious. They have very strong growth components in both the fourth and the fifth years that really reward you," said Rick Peterson, president of Rick Peterson & Associates, an executive recruiting firm for the brokerage industry.

Recruiters said the fourth- and fifth-year incentives were new, while the terms of the initial three years matched what the brokerage had previously been offering for top performers.

The recruitment package may be part of a larger push by Morgan Stanley to grow its wealth management business.

Many see the appointment of Morgan Stanley co-president James Gorman as chief executive as a sign the firm is seeking to bolster its wealth management business while reining in its riskier trading business.

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