Top advisors reveal how wirehouses can retain the best young talent

Industry News

...The most important thing those firms can do, Tasnady said, is "determine where they can grow their revenue and client base the most in years to come. "If you're at $500k, where can you be to get to $1 million?"

This is especially important because advisors don't get paid on a salary basis and instead are compensated through "100% incentive" based pay, Tasnady said.

In the past, it was hard to break in because advisors had to have a certain amount of sales to survive, so they prospected with cold-calling. "Firms would hand you a phone book," he said. ....

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6 Wirehouse Comp Trends to Watch in 2023

Industry compensation experts say there likely won’t be many major changes at wirehouses in 2023.

...Compensation consultant Andy Tasnady, managing partner of Tasnady Associates, pointed to the fact that “grid creep” happens because, “as advisors got more productive, there’s a compensation cost effect to companies.”

Firms’ compensation as a percentage of revenue rises year to year as an advisor’s average revenues go up, and the effect adds up over several years, Tasnady noted.

“So that’s why firms sometimes put in grid adjustments, called grid stretches, as a partial way to slow down this cost increase effect, where to get the same percent payout rate, an advisor has to do a little bit more in sales that next year.” ....

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UBS is making no changes next year to its compensation plan for its U.S.-based financial advisors, according to a company memo seen by Barron’s Advisor.

...“Most advisors prefer no changes whatsoever unless you’re going to introduce a new bonus,” Andy Tasnady, a compensation consultant, told Barron’s Advisor last week. Plus, the wirehouses have increasingly moved toward a fee-based revenue model from primarily a transactional one. This year markets have tumbled and so have wealth managers’ assets under management. At UBS, total assets for its Americas wealth unit declined to $1.5 trillion for the third quarter from $1.7 trillion for the same period a year ago; fee-based assets fell to $742 billion from $848 billion, according to the company’s recent earnings report. ....

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Merrill Lynch’s plan to curtail the credit that brokers can earn on commissions has roiled many of the firm’s 11,000 brokers, including some firm veterans and lifers who have said it will have far-reaching implications for their business.

....While the industry has been nudging advisors to advisory accounts, Merrill’s change is one of the most substantial compensation shifts in recent years to de-emphasize commissions, said Andy Tasnady, a compensation consultant in Long Island who regularly works with wirehouses on broker pay plans. ....

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Merrill Lynch advisors may need to work a little harder next year to earn the same pay under the wirehouse’s 2023 compensation plan.

By Andrew Welsch | Nov 11, 2022

...“A minor change to a minor policy can add up to meaningful cost savings for these firms, and maybe also drive behavior,” Tasnady says, pointing to how wirehouse advisors have become more fee-based and focused on serving higher-net-worth clients....

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Advisor consultants Mark Elzweig and Andy Tasnady cheered the move.

...“I think it’s a good idea because teams for many clients and advisors and firms are a superior service model,” compensation consultant Andy Tasnady, managing partner of Tasnady Associates, told ThinkAdvisor in a phone interview.

“You have better coverage for clients in terms of getting a hold of an advisor or seeing one,” he said. If an advisor “goes on vacation or is ill, there are backups. You can also split up the work. It’s just more efficient, and that’s why more firms and more advisors have been migrating [to] the service approach.” ....

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More Bad Press for the Wirehouse

...Compensation consultant Andrew Tasnady, managing partner of Tasnady Associates, guessed that Wells Fargo’s diversity hiring was “initiated with good intent.” However, “unless you keep an eye on how things are being implemented, you always have the opportunity for individuals to stretch their behaviors in order to make certain goals,” he told ThinkAdvisor in a phone interview Monday.

“I would be on the lookout for this type of behavior at every firm that has that type of a metric” it’s looking for when it comes to diversity hiring, he said, comparing what Wells Fargo was accused of to a practice that had been alleged in the National Football League.

Whether Wells Fargo is ultimately charged with any crimes by the DOJ, this is just more “bad press” for the firm, Tasnady said. ....

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Experts React

...Compensation consultant Andrew Tasnady, managing partner of Tasnady Associates, told ThinkAdvisor in an email he “never heard of anything or complaints like this regarding Wells Fargo.”

But “in general,” he said, “I would not be surprised that some firms and/or departments within some firms, might just be halfheartedly interviewing candidates even after they have identified (often an internal) candidate for a position. Diversity goals around interviewing diverse slates of candidates, while a positive partial step, might lead to this type of behavior.” ....

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The shift is a logical one as the industry continues to shift in favor of fee-based advice, recruiters say.

...Similarly, Andy Tasnady, managing partner of Tasnady Associates, told ThinkAdvisor by email Monday that the moves by LPL and now Commonwealth “makes sense now that the retail investment world (and its revenues) are now fee-based rather than the older school transaction (trade) based.” After all, the “biggest revenue sources now are fees from managed money and, to a lesser extent, spreads on cash balances,” Tasnady added. ....

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By Jeff Berman| Jan 31, 2022

...Offering a more optimistic take was Andy Tasnady, managing partner of Tasnady Associates. “A new, shorter trainee program can work (at least for Merrill Lynch’s goals), as long as it still delivers on the new, somewhat less demanding training process required,” according to Tasnady. A broader array of product and service knowledge requirements, but less selling, makes sense, he said by email. ....

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UBS Wealth Management USA is introducing today a new payout grid that will overhaul its payout formula for its roughly 6,000 brokers next year

...“It sounds like it will be a simpler design for the future, but the impact is going to be customized for each individual on each team for each length of service and production level,” said compensation consultant Andy Tasnady, who was briefed on the plan by a reporter. “Every person is going to have to evaluate the impact.” ....

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J.P. Morgan Advisors is giving its “outdated” broker compensation plan a makeover with a revamped payout grid and new bonuses for gathering more assets, loyalty, and teaming

...Trailing-12-based grids, which are used by three of the four wirehouses, are typically more favorable for advisors, although it will ultimately depend on the specific grid rates, according to compensation consultant Andy Tasnady, who was not involved in crafting the new plan. The new bonuses also reflect popular behavioral incentives included in compensation plans at many of the major wirehouses, adding to its appeal for prospective hires, Tasnady said. ....

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By Mason Braswell | Sep 16, 2021

...The expectation is that many firms will likely continue to make tweaks only on the margins as the rebounding markets have taken pressure off senior executives to cut costs, according to compensation consultant Andy Tasnady.

“The firms have shared in the revenue growth and increased profitability, so the pressure is not on as much to reduce costs at the sales force,” said Tasnady, who was not familiar with Raymond James’ plan. “I don’t expect a lot of big changes.”....

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4 questions for broker compensation consultant Andrew Tasnady

.In a new episode of the Financial Planning podcast, consultant Andrew Tasnady explains how employee-channel firms’ compensation stacks up against one another.

...The founder of Tasnady & Associates conducts the research behind FP’s annual survey of broker compensation at wirehouses and regional firms, tracking the largest payouts across ten firms at various levels of production. In the podcast, FP Chief Correspondent Tobias Salinger asks Tasnady the following four questions about the main takeaways from this year’s survey and how he expects compensation grids to change in the future. ....

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The Buzz

...Andy Tasnady, managing partner of Tasnady Associates: “There’s multiple reasons” for the declining number of registered reps, and “I do think the trend will continue.” “The growth of the alternative investment channel, I think, is one of the bigger” reasons, he said, pointing to the “Schwabs of the world and the Robinhoods of the world.” ....

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What You Need to Know

...“I don’t think there’s a big push to stop cold calling at most firms,” according to Andy Tasnady, managing partner of Tasnady Associates. “The whole industry is 100% commission-based, so I don’t see most firms limiting cold calling formally at all.”

Merrill is, meanwhile, “somewhat unique” because it has a “large formal training program, [whereas] most firms don’t have any training program or, if they do, it’s very ad hoc [and] not centrally managed,” he explained. ....

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By Andrew Welsch | Apr 22, 2021

...Data was collected by Arizent and analysis conducted by Tasnady & Associates. ....

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Where do top advisors earn the most?

...“There’s so much competition, and it’s not even just the independent channel. It’s also all the new fintechs,” says compensation consultant Andy Tasnady. Data was collected by Arizent and analysis conducted by Tasnady and his firm, Tasnady & Associates. ....

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...Others, like Tasnady Associates Managing Partner Andy Tasnady, agree: “A lot of the brokerage firms that used to pitch their own proprietary product years ago, with their own special funds,” don’t do that anymore, he explained.

Portfolio platforms now tend to be “open and you’re selling access to the world’s best investment ideas, not just your own company’s,” Tasnady said in an interview, adding that some Wells Fargo rivals moved earlier to sell off their asset management divisions.

Another issue is that “the asset management business itself has become fairly difficult,” with a lot of the money moving to exchange-traded funds where there is “tremendous fee compression,” he pointed out. ....

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Recent legal actions have focused attention on wirehouses’ deferred compensation plans, a persistent source of discontent for some financial advisors, according to recruiters.

...Employers, in comparison, view the “golden handcuff” aspect of deferred compensation as its primary benefit, says Tasnady Associates owner Andrew Tasnady, who has helped wirehouse management teams develop their deferred compensation plans.

“The original intent was as a retention device, similar to executive compensation deferred comp designs, where you’re basically trying to retain your high performers, so that, if someone gets an offer to leave, there is a little more of a hurdle for them,” Tasnady says. “If they stay, they have an opportunity for added annual compensation.” ....

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By Miriam Rozen | Dec 18, 2020

...Merrill’s decision to move to a policy of zero payouts on small accounts doesn’t shock Andrew Tasnady, owner of compensation consulting firm Tasnady Associates. “Over the years, Merrill has been the most aggressive in initiating a small account penalty,” he says. “So, it’s not surprising that they knock it down to zero.” ....

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Morgan Stanley is keeping its core advisor compensation plan the same for 2021 while tweaking some associated policies.

...“The team bonus payout rate qualification change really would affect the junior members the most, as they are the ones that can really get a big pay rate percentage boost from going [up] to the payout rate of the top team member,” said Andy Tasnady, managing partner of Tasnady Associates. However, “I would hope most teams have at least 10% of their accounts with a financial plan if they were operating as a top quality service team, but you never know,” Tasnady added. ....

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UBS won’t be making changes to its advisor pay plan next year.

...After a tumultuous 2020, that’s likely welcome news to the wirehouse’s more than 6,000 advisors. “In this year of stress, not changing is a safe move, particularly if only minor tweaks would likely be considered anyway,” compensation consultant Andy Tasnady said in an email. Advisors love “no change” years, he adds. ....

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But the firm’s decision to leave its comp grid alone stands as welcome news for advisors, consultant Andy Tasnady says

...“The fact that they didn’t change the core grid is always welcome news by advisors” because that is what “the majority of their comp is determined by,” Andy Tasnady, managing partner of Tasnady Associates, said Friday.

Meanwhile, the “minor tweak” that Merrill Lynch made “on the remaining 20% payout” to advisors with clients $100,000-$250,000 was “not a very big issue,” he told ThinkAdvisor. After all, the move was “certainly consistent with the 20-year progress that Merrill’s been undertaking on reducing payouts on small accounts,” he said. ....

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Planned hikes in production thresholds and other factors impacting wirehouse advisors’ pay got put on ice in response to the global pandemic earlier this year.

...But Andrew Tasnady, owner of compensation consulting firm Tasnady Associates, offers that advisors may be spared if the shift to remote work lets firms chop real estate costs. With advisors now having worked remotely successfully for so long, wirehouses may become more malleable in their business models and squeeze enough savings from eliminating office space to leave FA pay untouched, he says. ....

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Financial advisor trainee washouts are a persistent problem in the broker-dealer industry, so firms must retool their training programs to survive the competition, according to researchers and consultants.

...Andrew Tasnady, owner of compensation consulting firm Tasnady Associates, has a similar prognosis: only about 25% of FA trainees will survive more than three years in the business. Firms must retain more trainees if they want to increase returns on training investments, Tasnady says. They must have a five- or 10-year time horizon when assessing potential returns on their training because thinking short term will tempt them to “reduce, eliminate or suspend” programs, he says. ....

Read more at Financial IQ or download

By Andrew Welsch | May 13, 2020

...Data was collected by Arizent and analysis conducted by Tasnady & Associates. ....

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Which firms pay advisors the most?

...Typically, pay changes target lower-producing advisors, says compensation consultant Andy Tasnady, who helped prepare this year’s analysis. ....

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...Whatever compensation changes that were going into effect this year have been swamped by pandemic’s economic fallout, says compensation consultant Andy Tasnady, who helped prepare this year’s analysis. “People who were making $400,000 are going to make $300,000.” ....

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Consultant Andy Tasnady explains recent changes at Wells Fargo, Morgan Stanley and UBS.

...This year, Merrill limited changes, while the other wirehouses plowed ahead with adjustments for the next 12 months. ThinkAdvisor recently interviewed Andy Tasnady, head of compensation consultants Tasnady & Associates, about the broader picture painted by those changes. ....

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By AdvisorHub Staff | Dec 12, 2019

...“Wells was the last of the Big Four to adopt a lower payout policy for small households, but now that they joined in adopting a penalty policy, they may be trying to catch up to the other firms,” said Andy Tasnady, a compensation consultant who did not work on the firm’s 2020 plan. ....

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By Andrew Welsch | Dec 12, 2019

...“Today, the best advisors may have just 100 accounts, but they’re large accounts and advisors focus on really servicing them. You end up generating more business than you would if you had 1,000 [small accounts],” says compensation consultant Andy Tasnady. Large advisors are unlikely to be affected by the changes, Tasnady adds. ....

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By Mason Braswell and Jed Horowitz | Dec 10, 2019

...Andy Tasnady, a compensation consultant, said that the approximate 20% threshold raise across the new plan is “as large a grid stretch as I’ve ever seen,” estimating that it will affect a majority of UBS’s brokers in the U.S. UBS is the second big brokerage firm to retreat from recent years’ efforts to keep compensation grids unchanged in an effort to assuage brokers. Morgan Stanley last month raise hurdles by about 10% for all but the top rank (55.5% payout for $5 million producers) of its nearly 16,000 brokers. ....

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By Andrew Welsch | Dec 06, 2019

...Payout rates are typically higher at independent broker-dealers than employee broker-dealers, but they do not include various fees charged to advisors. Losing the incentive awards — which included one for tenure — may not adversely affect all advisors. But, “if you were achieving them, then you’ll miss it,” says compensation consultant Andy Tasnady.

From the corporate point of view, not all bonuses are created equal. Will advisors grow faster if there is a production bonus? “Sometimes they put them in and they end up paying for the same growth they would have gotten anyway” Tasnady says. ....

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By Elizabeth Dilts Marshall | Nov 19, 2019

...The 2020 compensation plan could affect as much as half of Morgan Stanley’s advisers, said compensation consultant Andy Tasnady of Tasnady & Associates. As of Sept. 30, that headcount stood at 15,553, down from more than 18,000 a decade ago.

The pay-out grid is closely watched by advisers, especially those in lower tiers. Tasnady compared the grid to a flight of stairs. “They basically raised the heights of all the stairs,” he said. “If you do the same thing you did last year, there will be many people who get a payout that is one step lower.” ....

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Morgan Stanley advisors may have to work just a little harder to earn the same pay next year as the firm raises thresholds for its compensation grid.

...Andy Tasnady, a compensation consultant, says that while bonuses can be difficult to implement, payout grid changes are easier to put in place. “You can model it very easily,” Tasnady says. Timing also helps. It’s also more palatable to move grid thresholds in an up market than a down market, Tasnady says. ....

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Merrill Lynch Wealth Management’s current advisor-compensation structure is driving advisors to ramp up their acquisition of new clients

...At this point it’s hard to tell whether Merrill Lynch will lift the six-household target for its 2020 plan, but the firm should have a better idea by the second and third quarters, says Andy Tasnady, a compensation consultant with Tasnady & Associates. ....

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...a shift aimed at providing more clarity on how fees reflect account performance.

...From a customer perception view, a smaller monthly fee is likely to be better received than the quarterly figure they now see, said Andy Tasnady, a compensation consultant. ....

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Where can advisors get paid the most?

...“Most of the time the grid isn’t changing. It’s these other areas where the action often is,” says compensation consultant Andy Tasnady, who helped prepare this year’s analysis.

For its 2019 comp plan, Wells Fargo kept a client segmentation award the firm instituted under the prior year’s plan intact. The bonus is designed to encourage advisors to work with wealthy clients, but advisors may need to work a little harder this year to keep pace with changes to the firm’s grid as base revenue tiers for deferred pay shifted upward. Each tier’s maximum increased by about 10%. For example, the second revenue tier shifted from a range of $500,000 to $700,000 under the 2018 plan to $550,000 to $770,000 in 2019. Morgan Stanley added new incentives to spur its advisors to bring in more clients while Merrill Lynch kept a key bonus introduced under its 2018 plan intact. Bonuses combined with household minimums are intended to push advisors to be more efficient.

“You can’t really grow without focusing on larger accounts because you max out,” Tasnady says. “You run out of time to serve too many smaller accounts.”

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Merrill Lynch Wealth Management has posted record net new household growth for its first quarter, after the firm revised its advisor compensation plans to drive organic growth.

...Across the industry, it’s been difficult for firms to add net new accounts, since they are focusing on providing ongoing financial advice, modifications to their clients’ accounts, reports and updates, says Andy Tasnady, a compensation consultant with Tasnady & Associates. “I think over time as the industry has matured, it’s very easy to reduce your focus on prospecting and trying to get new accounts,” he says. “You need to have lots of meetings and discussions to try and develop new business. It’s easier to serve existing accounts than getting brand new accounts.” ....

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Where can advisors get paid the most?

...“Most of the time the grid isn’t changing. It’s these other areas where the action often is,” says compensation consultant Andy Tasnady, who helped prepare this year’s analysis. ....

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For advisors wondering which firms pay the most, it’s worth asking another question entirely: Is it time to look past compensation plans?

...“People ask me all the time, ‘I’m at firm XYZ, where should I work to get the most pay?’ I say, ‘go where you can make it to $2 million [in production],’” says compensation consultant Andy Tasnady. In other words, the best comp plan may be the firm that helps an advisor grow at a faster clip. ....

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Wells Fargo Advisors told brokers in its private client group on Thursday that it won’t be rocking the boat on their 2019 compensation, with the exception of a payout cut to its lowest producers.

...The penalties for low producers are generally in-line, if not slightly less punitive, than “penalty box” policies at competitors such as Morgan Stanley Wealth Management and UBS Wealth Management USA, said Andy Tasnady, a retail brokerage compensation consultant who helped design Wells Fargo Advisor’s two-tier monthly plan more than a decade ....

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Top FA comp consultant Andy Tasnady tells ThinkAdvisor about what's changing, and what isn’t, in wirehouse pay packages.

...The wirehouse tug of war over control of hiring and retaining financial advisors will see no let-up next year, Andy Tasnady, consultant to firms on FA compensation plans, tells ThinkAdvisor in an interview. ....

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The brokerage is keeping 3 percent of advisors’ production credit each month.

...One registered investment advisor called the changes “insane” on Twitter and others lambasted Merrill Lynch for the changes but the move wasn’t anything out of the ordinary, said Andy Tasnady, the managing partner of Tasnady & Associates, a consulting firm that works with large ... ....

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The wirehouse is tinkering with its compensation program so more elite advisors will stay with the firm and find successors within.

...But while the wirehouse is touting its new offer, industry experts point out that the program is only poised to help about 800, or 5%, of its advisors. “Very few qualify for [the new program],” Tasnady said. “A $10 million revenue level is very theoretical. It’s a level that only a few can hit,” he added, noting that this is pretty much the case for the $5 million and up level, too. ....

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UBS will again largely refrain from tampering with financial advisor pay under next year’s compensation plan, the wirehouse told advisors on Wednesday.

...Andy Tasnady, a compensation consultant, says advisors can be suspicious when they hear that there are comp changes because they think it’ll be negative for them. “It’s usually good news when a firm can say there are no changes in the comp plan,” he says. ....

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Top-producing financial advisers act with independence unheard of elsewhere in corporate America and wield power over their assistants' pay.

...Morgan Stanley says the company, not its brokers, makes final decisions about hiring support staff and is seeking to hire more women as advisers. Branch administrators help check the power of individual brokers by overseeing performance reviews and managing support staff, according to Andy Tasnady, a brokerage firm compensation consultant. ....

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By Andrew Welsch | May 03, 2018

..."They’ve been making tiny tweaks to bonuses, but the core comp hasn’t changed for most people," says Tasnady, who helped prepare this year's compensation analysis. ....

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Industry watchers expect the probe into the wealth management unit to hurt advisor recruiting and retention.

...What’s Next? Andy Tasnady of the compensation consulting group Tasnady and Associates, however, sees the latest reviews as being “on the fringes of main business.” Alternative investments, mentioned as part of the rollover review, “are a very small percent of their business,” Tasnady explained. ....

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Why Are So Many Reps Leaving Wirehouses?

More and more lower-producing FAs are seeking grenner pastures as comp structures change. But bigger producers are leaving, too.

...Forecasts Tasnady: "The net effect will be more advisors - the volume that used to go to UBS and Morgan Stanley - eding up at large regionals that stay in the protocol" ....

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Some veteran advisers say the growth hurdles are high and make it likely that many will lose pay next year

...The reason, say some observers, is because Merrill is trying to retain and groom its younger ranks into more successful brokers at a time when the industry faces an aging workforce, a recruitment retrenchment and growing demand for technology-driven advice. Paying more at the bottom gives “breathing room” to brokers just starting out, said Andy Tasnady, an industry consultant who helped develop Merrill Lynch’s 2018 pay plan. ....

Read more at The Wall Street Journal

Merrill Lynch Revamps Broker Pay to Reward Referrals, Stronger Growth

Merrill’s 2018 pay grid ramps up asset, client targets and aims to bolster broker retention

...Merrill Lynch is adjusting the way it rewards its brokers as it looks to juice more from its current ranks while ensuring wealth-management clients are referred to the parent bank. Bank of America Corp’s wealth-management arm in a memo to advisers that was previewed earlier Wednesday unveiled the changes to its 2018 compensation plan ....

Read more at The Wall Street Journal

2018 Comp: Merrill Lynch Adds Penalties/Rewards to Spur Asset Growth

...“It’s pretty bold in that it touches the third rail of compensation, the grid,” said consultant Andy Tasnady, referring to pay tables used throughout the retail stock brokerage community that tie the percentage of fees and commissions that brokers keep to their total annual production in the previous year. ....

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Morgan Stanley Lowers Broker Payout on International Accounts

...The monthly calculation could deter brokers from becoming overzealous about selling toward the end of a look-back period in order to notch a higher payout, said Andy Tasnady, a compensation consultant based in Long Island who has not been briefed on the new Morgan Stanley calculation. ....

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UBS Nudges FAs to Move Small Accounts to Call Center

UBS Wealth Management Americas is adjusting its payout plan to encourage advisors to shift smaller accounts to its call center, FA-IQ sister publication FundFire reports.

...Meanwhile, UBS is also using a “placeholder strategy” on paying advisors for retirement account assets, Andy Tasnady, head of compensation consultancy Tasnady & Associates, tells FundFire. Next year, an advisor’s compensation on IRAs will be derived from the trailing 12 months that ended in September this year, FundFire writes. Tasnady tells the publication this approach may change as the fate of the rule becomes clearer. ....

Read more at Financial Advisor IQ

UBS surprises advisors with early comp plan reveal

UBS unveiled almost no comp plan changes to advisors on Tuesday, breaking with more typical wirehouse practice of annually tweaking such plans.

...Although the Department of Labor partially halted the fiduciary rule's, it isn't yet clear if the agency will ultimately repeal or only amend the regulation. That regulatory uncertainty may deter UBS and other firms from making changes to broker pay on retirement accounts, Tasnady says. "There are so many unknowns. It's a more difficult environment to introduce anything major," Tasnady says. ....

Read more at onwallstreet

New Rule Helps Curtail Wall Street ‘Prisoner Exchanges’ in Recruiting

Retirement-savings regulation curbs practice of paying big bonuses to lure brokers

....The fall in broker poaching is “certainly an environment that is healthier for the firms,” said Andy Tasnady, an industry consultant specializing in compensation plans. “It had just gotten out of hand,” he said, becoming “a very high-price option for growing your adviser base.” ....

Read more at The Wall Street Journal

How Wells Fargo is using 'counter-punch' to get unheard-of upper hand in the poaching wars with Morgan, Merrill and UBS

The DOL rule, abject opportunism and a little luck give the non-wirehouse wirehouse a window to reverse decades of getting bludgeoned by big checks

...“If bonuses were hitting 250 to 350% of the trailing 12 months and the big firms were hiring 300 to 400 people a year, now they’ll hire 100-200 people a year by offering less," says Andy Tasnady, a compensation consultant in the New York area whose specialty is broker pay.  "Wells Fargo, if it is still offering 250-350% should get a high proportion of the people in motion.” He works with most of the big brokerage firms. ....

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More culture, less recruiting: How UBS plans to grow

UBS's ambitious growth strategy omits a traditional wirehouse tactic: recruiting.

...In simplifying its plan, UBS also cut out a number of behavioral bonuses (and penalties), aligning it more closely with non-wirehouse firms, notes Andy Tasnady, a compensation consultant. "A lot of the regional firms don't have the behavioral-based bonuses. It was the big firms, the wirehouses that [traditionally] had them," Tasnady says. ....

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The impact of the DOL’s fiduciary rule on adviser recruitment and pay

The U.S. Department of Labor’s fiduciary rule, designed to eliminate conflicts of interest by requiring all professionals who provide retirement investment advice to put their clients’ best interest before their own profits, will go into effect on April 10.

...“They issued strong language on not using back-end bonuses that might encourage recently hired advisers to push clients too hard or inappropriately into new sales or revenue generating situations,” said Andy Tasnady, managing partner of Tasnady & Associates, a strategic consultancy specializing in compensation. “This has led to some suspensions and removal of back-end bonuses in new offers and a restructuring of deal calculation basis.” ....

Read more at efinancialcareers

Wells Fargo to End Broker Bonuses Tied to Loan Sales

Move comes as bank continues to face outrage after paying a fine related to retail-banking sales practices

..."With the difficulties at Wells Fargo, there might be some heightened sensitivity to the shape of those bonuses," said Andy Tasnady, head of a compensation consulting firm. "Firms other than Wells Fargo will likely keep the lending bonuses, but they will be very careful in how they are administered." ....

Read more at The Wall Street Journal

Merrill, Morgan unveil comp plans, but advisers should expect changes

Merrill Lynch and Morgan Stanley are going in opposite directions once again, as the former told advisers that its grid is unchanged under next year's comp plan while the latter raised some hurdles by 10%.

...Some broker pay changes occur over a longer term period. Andy Tasnady, a compensation consultant, does not anticipate that firms will make significant changes to their compensations plans mid-year. But, he says, client reactions to how firms implement the rule next year could drive unexpected changes. "Will there be a challenge with everyone signing these best interest contracts? In other words, will there be a change in client acquisition and retention?" Tasnady asks. "That's when you should look for them to make potential changes to the compensation structure."....

Read more at OnWallStreet

Compensation 2016 - What's Next for Advisor Pay?

For many advisors, the guide to their firm's compensation plan seems to get longer every year. Some advisors joke that they have to rifle through dozens of pages just to find out where their pay has been cut.

...Andy Tasnady, a compensation consultant and head of Tasnady Associates, says more firms might implement new changes to their small-household policies, but the pace of acceleration may slow down at firms such as Merrill Lynch, that have already moved further along this path. ....

Read more at OnWallStreet

Wealth management compensation: What U.S. financial advisers get paid

...“A lot of the deals require advisers to reach a particular sales level to get all of the payouts,” says Andy Tasnady, managing partner of Tasnady & Associates, a strategic consultancy specializing in compensation. “Advisers have to continue to grow their book of business and achieve results to get backend payouts, hitting certain targets that the firm sets. ....

Read more at efinancialcareers

"Cross-Selling Scrutiny Puts Wirehouses in Regulatory Crosshairs"

Industry regulators have set their sights on “aggressive” cross-selling, putting wirehouse and bank practices in the crosshairs.

...These cases will likely serve to make other banks more cautious when it comes to cross-selling incentives and compliance controls, says Andy Tasnady, head of compensation consultancy Tasnady & Associates. “It just has to be done more carefully,” Tasnady says. “You don’t want to design an incentive that can be pushed too far to lead to behaviors that you didn’t want.”....

Read more at fundfire

Investment banking versus wealth management: Which pays the most?

This is what you’ll earn in wealth management in the U.S.

...“These are not exact calculations from any one data set or survey, but reflect our experiences in designing compensation plans for regional and national employee-based wealth advisory firms over the years,” said Andy Tasnady, managing partner of Tasnady & Associates, a strategic consultancy specializing in compensation. “Recognize that the total compensation is based 100% on their compensable sales revenue levels.” ....

Read more at efinancialcareers

Rewriting the rules? The impact of UBS comp changes

Analysts and industry insiders are divided as to whether UBS' revamped comp plan may spur rival firms to follow suit – and whether the wirehouse's changes will entice its advisers to stay put rather than go independent or accept recruiting bonuses to move elsewhere.

..."A juicier incentive for retirement at the current firm should lighten the motivation a bit for 'monetizing my book,'" Tasnady says, adding that could further reduce attrition at UBS with regard to other firms recruiting away advisers and the movement to independence. ....

Read more at onwallstreet

UBS raises adviser pay as part of sweeping changes

President Tom Naratil says the firm will recruit less, spend more on advisers already at the firm and give additional power to branch managers.

...Andy Tasnady, a compensation consultant, says that higher payouts for brokers may end up paying for themselves. UBS "may be able to pay for these changes through lower attrition – because that costs the firm when you lose advisers," Tasnady says, who was briefed on the changes. ....

Read more at onwallstreet

9 tips to max out compensation plans

Compensation packages aren't what they used to be – and won't look the same tomorrow as they do today. ...

Instead, "firms have really aligned around total adviser productivity," Tasnady, head of Tasnady & Associates, says. "Now instead of multiple payout grids due to differing products … there's one core payout grid." ....

Read more at OnWallStreet

DoL Fiduciary Rule May Spur Product Innovation

If the Labor Department's fiduciary rule is finalized later this month, not a lot may change on day one. But a period of widespread innovation of products and platforms may soon follow...

...Andy Tasnady, a compensation consultant and head of an eponymously-named firm, also sees a likely drop in revenues related to annuities, particularly in the independent advisor channel. "A higher portion of the advisors there get some of their business from the annuities, and other products," Tasnady told On Wall Street last month. ....

Read more at OnWallStreet

Ameriprise Shifts Comp Grids

Ameriprise has shifted compensation grid thresholds for some lower producing advisors in its employee channel, according to documents viewed by On Wall Street.

..."In a year of relatively little changes, this strikes me as the biggest one," Tasnady says of Ameriprise's changes. "The timing is tough because it looks like they are heading into a down year. So the pain for advisors may be even greater." ....

Read more at OnWallStreet

Merrill Raises the Bar on Broker Pay

Merrill Lynch is moving the goal posts when it comes to broker pay.

..."It's a less contentious way of taking a little bit of money out of the comp plan," Tasnady says. Tasnady notes that in any given year there will be a different distribution of production across the advisor force; some will have boosted their business while others may have plateaued or even fallen back a little. ....

Read more at OnWallStreet

Compensation 2015 - Advisor Pay: What to Watch for Next

How much am I going to be paid this year? It's a question advisors ask themselves when they first glimpse changes to their firms' compensation plan.

. ...The firms "have been adding to their plans, but they tend to do it in deferred. You can add a 2% bonus for a certain behavior, but do so in 2% deferred," says compensation consultant Andy Tasnady, head of Tasnady Associates....

Read more at OnWallStreet

Brokerage executives enjoying steadily increasing payouts

As markets thrive and wealth management becomes a focus at major firms, brokerage execs see their pay rise

. ...“The brokerage business has been the recent star,” said compensation consultant Andy Tasnady of Tasnady Associates. “With the government reducing the leveragability of some of the other businesses, a lot of firms are making less money in the non-brokerage business while brokerage has been chugging along and going steady.” ....

Read more at InvestmentNews

Morgan Stanley Tweaks Bonus Plan; Adds Sports, Entertainment Group

Morgan Stanley is moving to defer slightly more compensation for its advisors in 2015, experts say, but just how financial advisors will react to the shift is debatable.

. ...“It’s a big company, so even a modest change can add up,” said compensation consultant Andy Tasnady of Tasnady Associates in Port Washington, New York, in an interview. “If you’re doing $10 billion in sales, a 1% shift from cash to deferred compensation is $100 million. That has a profit-and-loss benefit.” ....

Read more at ThinkAdvisor

UBS, Merrill increase bonuses for new assets and banking referrals

2015 compensation plans push advisers to build their AUM and refer clients to the bank

. ...“That's always an area of focus and contention — how fast and how far to promote the lending aspect of the bank,” said compensation consultant Andy Tasnady of Tasnady Associates. “It's a careful calibration for encouraging it without pushing it too far.” ....

Read more at InvestmentNews

UBS Reps to See Bigger Wealth Bonuses

The 7,000 reps are set to receive more fees and commissions tied to insurance, lending and planning work

. ...“The 6% level is the most I have seen from any major firm, in terms of what is being paid on an ongoing basis for the most-successful advisors,” said compensation consultant Andy Tasnady of Tasnady Associates in Port Washington, New York, in an interview. “This is a bonus that will be paid not just on growth [over last year] but on the overall business.” ....

Read more at ThinkAdvisor

Morgan Stanley Payouts in ’15: Will a Boost in Deferred Comp Hurt Reps?

Industry experts are divided on the impact of this shift on advisor retention and recruiting

. ...“It’s a big company, so even a modest change can add up,” said compensation consultant Andy Tasnady of Tasnady Associates in Port Washington, New York, in an interview. “If you’re doing $10 billion in sales, a 1% shift from cash to deferred compensation is $100 million. That has a profit-and-loss benefit.” ....

Read more at ThinkAdvisor

Morgan Stanley deferring more broker compensation in 2015

Grid levels remain unchanged, but a greater portion of payout will be tied to vesting requirements, company stock

. ...Morgan Stanley & Co. is set to make changes in 2015 that will result in brokers having more of their compensation deferred, according to a source familiar with the matter. ....

Read more at InvestmentNews

Compensation 2014 - It's all about Growth

Financial advisors expecting radical, across-the-board changes from last year's compensation plans will be largely disappointed.

. ...Instead, wealth management firms — coming off a banner year — are looking to repeat that success by tweaking their comp plans: Thresholds will rise, but ever so little; awards will grow too, if only a point or two.....Data compiled by compensation consultant Andy Tasnady...

Read more at OnWallStreet

New plan for Barclays advisers offers more even ratio between salary and bonus

Payout grid still in place but commissions will be paid quarterly instead of monthly

. ...“Advisers love to have a very direct clear opportunity to make money, so usually when people talk about base and bonus the first thing that tends to involve is a cap on the upside and often a lot of the best advisers will go running,” Mr. Tasnady said. “But this doesn't sound like that.”....

Read more at InvestmentNews

Compensation 2014 - It's all about Growth

Financial advisors expecting radical, across-the-board changes from last year's compensation plans will be largely disappointed.

. ...Instead, wealth management firms — coming off a banner year — are looking to repeat that success by tweaking their comp plans: Thresholds will rise, but ever so little; awards will grow too, if only a point or two.....Data compiled by compensation consultant Andy Tasnady...

Read more at OnWallStreet

New plan for Barclays advisers offers more even ratio between salary and bonus

Payout grid still in place but commissions will be paid quarterly instead of monthly

. ...“Advisers love to have a very direct clear opportunity to make money, so usually when people talk about base and bonus the first thing that tends to involve is a cap on the upside and often a lot of the best advisers will go running,” Mr. Tasnady said. “But this doesn't sound like that.”....

Read more at InvestmentNews

Bonus Season’s Cash Payouts ‘De Minimis,’ Expert Says

The latest figures don’t make an ugly picture for Wall Street employees any prettier

...“In 2011, when the bonuses totaled $18.5 billion, one could assume that the $4.5 billion drop from 2010 may have stemmed from increased deferred compensation being given as a proportion of total compensation,” said compensation consultant Andy Tasnady of Tasnady Associates in Port Washington, N.Y., in an interview.....

Read more at AdvisorOne

Compensation Plans Step Up to Next Level

Financial advisors who strive for more assets stand to reap new rewards.

..."They're definitely taking cues" from one another, Tasnady says of the wirehouse firms: Bank of America Merrill Lynch, Morgan Stanley, UBS, and Wells Fargo. "They have similar elements around growth—either growth in assets, growth in certain types of accounts, [or] growth in total sales."....

Read more at OnWallStreet

Raymond James’ Pay Grid Gets Long-Awaited Facelift

In one of the most dramatic overhauls to its compensation plan in two decades, Raymond James has introduced a new product-neutral pay grid as the firm looks to stay competitive with industry standards.

...Most firms have latched onto this strategy as a way to reduce the potential conflict of interest when selling products, according to Andy Tasnady of compensation consultancy Tasnady & Associates. “They’re one of the last one’s left with product based payouts,” he said....

Read more at OnWallStreet

BofA-Merrill New Comp Plan: Good News, Bad News for Advisors

Bonuses on net new assets in 2013 are tied to fee-based flows, loans and similar products

...“There is a revision to the bonus plan that could make it actually harder to earn the initial amounts,” said compensation consultant Andy Tasnady, in an interview with AdvisorOne. “Not all assets count, namely non-fee based assets like cash, bonds and equities that are not in certain wrap arrangements.”...

Read more at AdvisorOne

Morgan Stanley’s 2013 Advisor Comp Plan Seen as Good for Medium Term

New stock ownership and other shifts may not help in the short run, experts say, but provide benefit as time passes

...In the short term, the compensation changes “may not have much of impact on those waiting to and ready to leave,” said Andy Tasnady, managing partner of Tasnady & Associates, which works on compensation planning, performance measurement and plan design, in an interview. “They are motivated by the cash they can get from upfront deals and upfront rates” at rival firms....

Read more at AdvisorOne

Rep.'s Annual Compensation Report 2012: The Chink in the Ka-Ching

Small household accounts have always been the bane of brokerages' existence, and advisors who work with such clients do so at the peril of their own compensation.

...Andy Tasnady of Tasnady & Associates, a compensation consultancy in Port Washington, N.Y., that specializes in the financial advisory industry, says account minimums have been around at least 15 years. Part of the rationale is efficiency; successful brokers cannot have too many relationships, he says. “When you want to provide advice, you can’t be good at it with 1,000 clients,” Tasnady said. “If you’re only going to have 200 or 300 clients, they may as well be large ones.”...

Read more at WealthManagement.com

Analysis - Broker bonus bidding war comes at a cost

(Reuters) - Bonuses offered by the U.S.'s biggest securities companies to recruit top brokers are reaching their loftiest levels since the financial crisis, and none of the big firms are retreating from the bidding war.

...assets, according to Cerulli. Game of chicken Andy Tasnady, a sales force management and compensation consultant at Tasnady Associates, said retail brokerages have no choice but to recruit because they can no longer rely on inexperienced advisers making cold...

Read more at Reuters

Dealing with clients' scandal anxiety

(Reuters) - When Wall Street misbehaves, it's often a financial adviser who ends up on the hot seat, left to answer the public's questions.

...Andy Tasnady, founder of the consulting firm Tasnady & Associates, said that clients mostly want to be assured of two things during the conversation: "Is my money safe?" and, "Can I trust the people and products from this firm?"...

Read more at Reuters

Compensation 2012

Our annual pay scale issue

This year in our cover story, we see UBS taking the top spot at the $1 million and $600,000 producer levels among the four wirehouses. Raymond James grabbed the lead among the regionals at the highest level, with Janney Montgomery Scott on its heels. And, for the first time we've included Southwest Securities on our list of company grids, although not in our comparative charts. As always, it's a challenge, comparing apples and oranges. However, with the help of compensation expert Andy Tasnady, we believe we do a credible job. .....

Read more at OnWallStreet

Go Teams!

Our Annual Compensation Ranking Examines Team Remuneration Along With the Best Payout Plans

The results may surprise you. With the help of our outside compensation expert Andy Tasnady, we found out which firms came out on top at the $1 million, $600,000, $400,000 and $200,000 production levels......

Read more at OnWallStreet

Compensation 2011

Your definitive guide to the changes in advisor compensation across the industry

While recruiting packages generate a lot of interest , the actual pay that advisors receive from their firms doesn't get as much attention. So once again, On Wall Street has sifted through the payout grids in our industry for a unique comparison of their pay packages. And we returned to our outside compensation expert, Andy Tasnady, to create our signature comparative chart, which ranks the firms based on various levels of advisor production.....

Read more at OnWallStreet

Taking Long-Term View on Advisor Pay

"The real question is…where can you best grow your business," says Andy Tasnady, a financial advisor compensation consultant with Tasnady & Associates. And the answer, he says, is different for every advisor, depending on the technology and training they need, the level of competition at the branch, the relationship with the manager and possibilities for marketing.

Read more at Financial Advisor

Financial Advisers Moving For the Money

Compensation for financial advisers varies a lot depending on the brokerage channel they work in, be it the wirehouse world, independent space or at a mid-size or regional firm. But compensation consultant Andy Tasnady, with Tasnady & Associates says, the right fit isn’t entirely based on the payout....

Read more at The Wall Street Journal

Compensation 2010

Your definitive guide to the changes in advisor compensation across the industry

by Helen Kearney | March, 2010

There has been a shuffling of the deck in our comparative compensation chart this year. The chart, compiled by compensation expert Andy Tasnady, shows you the pay you can expect from all the firms at a your level of production...

Read more at OnWallStreet