Morgan Stanley has become the first wirehouse to announce its 2027 compensation plan, raising production thresholds for advisors as strong markets have pushed revenue higher.
The firm will increase revenue thresholds across its core production-based payout grid by about 10 percent, according to AdvisorHub. An advisor who generated $1.1 million in revenue this year, for example, will need to generate $1.2 million in fees and commissions next year to maintain the same payout rate.
Morgan Stanley will continue to pay advisors between 28 percent and 55.5 percent, depending on where their production falls across the firm's 16 revenue bands.
The change follows a pattern that Morgan Stanley veterans have seen before. According to AdvisorHub, the firm has raised grid thresholds by approximately 10 percent every three years since at least 2014. Average advisor production has also increased 56 percent over the past three years as equity markets approached record levels and the firm's workplace and self-directed channels directed additional assets to advisors, according to the sources.
Separately, AdvisorHub reports that Morgan Stanley plans to enhance its retirement program in 2027. Advisors with at least 30 years at the firm can add 17 percentage points to their payout rate while participating in the firm's Advisor Legacy Program.
Morgan Stanley's changes come as major brokerage firms seek to encourage advisors to retire in place while independent firms command record valuations and competitors offer substantial recruiting packages. At the same time, Morgan Stanley has accelerated its recruitment of experienced brokers, with its recruiting loan balance rising above $5 billion.
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