Morgan Stanley to Offer Internal Revenue Sharing for Wealth Managers

Stephen Harris

17 October 2006

Morgan Stanley is close to finalising an internal revenue-sharing deal designed to encourage its investment bankers and private bankers to work more closely together, according to the Financial Times. The US bank’s revenue-sharing deal is part of efforts by John Mack, chairman and chief executive, to encourage co-operation between departments after a long period when employees were given little incentive to work together, according to the report. The agreement, which will have global reach, will determine how much investment bankers and private bankers will be paid if they introduce clients to each other. Many of the top tier international wealth managers say that referrals from their investment banks are a major source of top quality new clients, but Morgan Stanley’s is thought to be the first attempt to formalise the process with a revenue sharing model. The rewards are potentially enormous for private bankers passing on business to their investment banking colleagues, say analysts.