has begun charging clients for basic brokerage services that were previously free, according to brokers from the firm. The firm also raised fees on basic brokerage services, according to the reps.
The change in company philosophy is a result of the market downturn and an “attempt to boost the bottom line,” according to a firm spokesperson.
The fee increase, Morgan Stanley’s first in 10 years, includes brokerage accounts, accounts transfers and, the firm says.
Here is a breakdown of the cost changes:
* A basic brokerage account under $25,000, previously free, now carries a fee of $30. For accounts over $25,000, service remains free.
* Morgan Stanley’s premier brokerage account now costs $100, up from $80.
* Accounts inactive for one year will now cost a client $50, up from $30.
* An account transfer fee is $75.
* IRA account fees have risen from to $40 from $30. Transferring an IRA account now costs $75, up from $50.
* Mutual funds fees, previously free, are now $40 annually.
“The company has been real cost conscious during the downturn,” says an East Coast-based. “Frankly, a lot of us are surprised it took the company so long to raise fees on basic services that other firms have been charging for over the course of a few years.”
One of the problems, brokers say, is that clients paying one or two percent on fee-based accounts are upset about the fee increases.
“One of my clients was irate,” says a West Coast-based rep from the firm. “They were even more upset when they found out there was a $75 transfer fee. But that prevented them for leaving, even though they were ready to go elsewhere. This is the nature of the business now.”
Morgan Stanley says its fees were below average market levels. The increase, the firm says, puts it in line with competitors’ prices.