Morgan Stanley announced they’ll be changing their payout grid in 2017 — upping the level of production needed to attain the utterly ridiculous 32% commission share they’ve pulled out of their fucking asses.
As of now, a broker at Morgan Stanley needs to produce $220,000 in gross commissions — in order to retain a slap in the face — or 32% of what they produced. But in 2017, that same piker broker, albeit hard working and poor as shit, will need to produce $242,000.
Here is how the numbers work in the real world.
$220,000 at 32% payout = $70,400
But wait, there’s more!
From that $220k, one could assume a sundry of fees to be levied upon them. For the sake of brevity, let’s assume Morgan dings them around $1,000 per mo. Now you’re making $60,400 per annum.
At 25% Federal tax bracket, 5% state tax, social security, medicare, the low end Morgan Stanley broker will make around $38,000 take home per annum, or $3,200 per mo. That is poverty, literally.
Why in the world would anyone stay at Morgan when you could easily go independent and receive a 90% payout? Bear in mind, at an indie firm brokers will be under a 1099 schedule and will be able to write off many expenses — thereby lowering their tax burdens.
Alas, if you’re part of the elite club at Morgan, doing $5m or more in production per annum, you’ll still receive a payout ranging from 51.5% to 55.5%. Plus, you’ll get invited to annual golf matches and get to rub elbows with all of the wonderful C level execs at the firm.
These wirehouses are plantations for aspiring brokers and advisors. Avoid them like the plague.Comments »