High end producers have always been tops on Wall Street as far as payout goes.

But lately, we financial recruiters are seeing some regional firms creating new categories and upping their compensation for top end producers…so, you may ask, who are they and what are they offering?

During 2009, RBC Wealth Management brought in 308 advisors, and to entice the top producers they added three new brackets at the top end of their payout grid…and get ready for this, the grid goes all the way to $5 million-plus with a 50% payout - one of the highest in the industry! (Morgan Stanley Smith Barney’s new payout grid for million + producers tops out at 47%).  Read more...

Independent broker-dealers may have to reclassify independent FA’s as “employees” if the “Taxpayer Responsibility, Accountability and Consistency Act of 2009” is passed by Congress.

Not only would this affect the livelihood of over 178, 000 registered reps, but it could lead to high costs including back taxes, penalties and interest for the independent broker-dealers. For over three decades, the reps, classified as independent contractors, have been in compliance with applicable rules and have met all required regulations of the IRS.  Read more...

Shareholders cried “foul” against Morgan Stanley’s chairman and CEO for using 62% of the company’s net revenue for employee compensation. (After accepting a Treasury bailout).

The complaint demanded repayment and also that Morgan Stanley reform its pay practices. The lawsuit also wants repayment of incentive payments made in 2006 and 2007 “because they were based on financial results that were later proven to have been worthless”.

The suit was filed by the Security Police and Fire Professionals of America Retirement Fund and Central Laborers’ Pension Fund. No comment on the complaint from Morgan Stanley. (My comment…”grow”the pension funds, but keep the risk element out of it! Hmmm…if only it worked that way for us all!)

An interesting survey by Jefferson National cited that about 50% of 750 fee-based advisors interviewed said they are turning to a “tactical management” strategy, while 68% are feeling pressure to revise their asset management strategy from the traditional “buy-and-hold” strategy. Only 34% said their clients are more confident with the traditional buy-and-hold.

So, how’s it work and why in a volatile market climate?

The feeling is that the markets will continue to show volatility until a solid market recovery is more evident and the tactical strategy is designed to allow rebalancing the percent of assets held in various categories, therefore taking advantage of certain situations in the market as they occur.  Read more...