American Advisors headed for tough times

American Advisors headed for tough times

American Advisors headed for tough times
A report in the Financial Times this morning suggests austerity measures are coming to the advisory industry in America. The post-recession downturn has already led to lower bonuses on Wall Street. But so far the advisory sector has been relatively untouched by the cuts. This is about to change. According to the report, “executives at the top four firms – Merrill, Morgan Stanley, UBS and Wells Fargo– which employ about 50,000 financial advisers between them, say a wave of mergers is about to force pay down.” As with traders’ bonuses, banks have been pushed to act by depressed revenues and emboldened by industry consolidation. The averse US broker still wields more power in pay negotiations than a typical bond trader thanks to the close relationship with clients, many of whom will typically follow their adviser when he or she jumps ship. Wary of losing people and assets, the executives are focusing first on less transparent ways of improving their ratios of remuneration to revenues.“This is going to happen,” said one. “There are fewer places for people to go....The hand on the comp accelerator is likely to be less rather than more.”
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