Even though Morgan Stanley has been culling less "profitable" advisors from its fold, the fact that it is having to pay those left behind more to stay has actually dented its profitability.
Morgan trimmed a net 168 advisors from its payroll over the last quarter, but total compensation still edged up 1% -- $25 million, which means each advisor's personal take in the quarter edged up about $2,400 on average.
That's not an enormous quarter-to-quarter bump, but when you consider that overall AUM and profitability dipped 1% over the same period, it's not really encouraging.
As it is, Morgan squeezes a 9% margin on its business. Wall Street and management alike want them to be generating 20%. Is that even possible?