At a glance
- Morgan Stanley and others have long held back a small share of an advisor's gross revenue as deferred compensation, which vests over years and is forfeited if the advisor leaves.
- Louis Diamond, CEO of Diamond Consultants, said a retention bonus differs from deferred pay because the firm pays to keep a group before it jumps.
- Advisors weighing an RIA or independent broker-dealer offer now have a firm-paid retention bonus to compare against deferred pay they would forfeit on leaving.
Big brokerage firms are turning to pay to keep advisors, InvestmentNews reported Oct. 26, with UBS and Ameriprise Financial introducing retention bonuses in 2026 and 2027. Morgan Stanley and others have long held back a small share of an advisor's gross revenue as deferred compensation, which vests over years and is forfeited if the advisor leaves.
Louis Diamond, CEO of Diamond Consultants, said a retention bonus differs from deferred pay because the firm pays to keep a group before it jumps. He said Ameriprise would rather pay up than watch advisors go, and that there is speculation other firms are weighing retention notes for larger teams. InvestmentNews ties the shift to experienced, profitable advisors leaving for RIAs and independent broker-dealers, where pay is often much higher.
Advisors weighing an RIA or independent broker-dealer offer now have a firm-paid retention bonus to compare against deferred pay they would forfeit on leaving.
Private Wealth Daily previously reported that UBS recruited eight teams and $5.3 billion of disclosed books while $11 billion walked out.
Reported by The Close desk from InvestmentNews. Published . Corrections