and Morgan Stanley
have stopped paying trail commissions smaller accounts, reports the Wall Street Journal
. The two firms join Piper Jaffrey, which already does not pay commissions on accounts less than $10,000.
Merrill has stopped paying brokers commissions on accounts with less than $50,000 in assets. Previously, Merrill's brokers were paid 25 percent of gross commissions on trades more than $500, as well as trail fees of 35 percent of ongoing commissions to mutual funds and other products, reported the WSJ
, citing unnamed sources.
Morgan Stanley's brokers were paid 20 percent of gross commissions on trades and 30 percent of gross commissions on asset-based fees on accounts under $35,000. They will now get zero commissions on accounts with less than $35,000. There may be some relief for Morgan Stanley's brokers, however -- the accounts levels are based on household assets rather than individual accounts.
reports that rivals Wachovia Corp, American Express Financial Advisors are not planning on cutting commissions for smaller accounts.
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