Dive Brief:
- Morgan Stanley, one of the world's largest financial institutions, has decided to stop the long-time industry practice of handing out huge commissions for senior broker advisor roles, reports Reuters.
- A staff memo from Morgan Stanley's co-heads Shelley O'Connor and Andy Saperstein was reportedly read by staffers at Reuters, which indicated the company has 15,000 brokers and that the move could impact recruitment of more experienced advisors because the company will no longer be handing out big recruitment bonus checks.
- In the past, the practice has been frowned upon because if gives larger firms an unfair advantage in terms of recruitment. Morgan Stanley told Reuters that they will honor approved recruitment offers in progress by June 16 for brokers who are joining the firm by September 1, but after that there are to be no more recruitment bonuses.
Dive Insight:
The financial world has been under consistent scrutiny since the Great Recession. The long-time practice of offering double-digit recruitment bonuses to experienced brokers, sometimes lasting years into their careers, has been one policy that no longer sits well with the industry.
Other financial companies have also recently eliminated this practice, in the hopes that it will open up more opportunities for brokers to pursue careers with their choice of company. Bullhorn research advised that financial service jobs are facing talent shortages, with around 73% of firms reporting trouble finding suitable candidates. The lack of more senior level brokers can be attributed to the recession that wiped out many jobs, and the increasing number of Baby Boomers leaving for retirement.
