Morgan Stanley beats ex-Fla. advisors’ claims to deferred compensation
Just weeks after losing a $1.1 million arbitration award to former advisors in a fight over deferred compensation, Morgan Stanley on Monday defeated a similar lawsuit from eight former brokers who sued the wirehouse in 2022 seeking $855,000 in deferred compensation they had claimed should be handed to them because it was retirement money protected by ERISA – the Employee Retirement Income Security Act of 1974.
A panel of three arbitrators under the aegis of Finra Dispute Resolution Services decided against the eight former Morgan Stanley advisors, who are scattered across Florida and have jumped in the past few years to a variety of Morgan Stanley competitors, including Wells Fargo Advisors, Raymond James & Associates Inc. and Ameriprise Financial Services.
According to the award, those eight advisors claimed, among other charges, a violation of ERISA by Morgan Stanley related to the firm’s various deferred compensation and incentive pay plans.
In an unusual development for Finra arbitration awards, the three panelists wrote a two page summary of their reasoning for denying the financial advisors claim. Finra arbitrators are not required to explain their decisions in disputes they oversee.
“The singular issue presented was whether [Morgan Stanley’s] Financial Advisor Deferred Compensation Program was governed by ERISA,” the arbitrators wrote. “Looking at [Morgan Stanley’s] Financial Advisor Deferred Compensation Program as a whole, both its operative provisions, and its language informing [the advisors] that it was not a retirement plan, that it was not an ERISA plan, etc., looking at the data on when most awards were received, and taking all of the other evidence into consideration, the majority of the Panel was not
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