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Opinion
Matt Levine

Morgan Stanley Brokers Pushed Loans to Win Dinners

Getting paid for selling products is inevitable, but in finance it somehow seems icky.

Morgan Stanley is in trouble in Massachusetts for allegedly running a sales contest for some of its financial advisers in which the advisers could win valuable prizes by convincing clients to borrow against their brokerage accounts. Except that the prize money could only be spent on entertaining more clients

Right away, we have come to an insurmountable imaginative divide between me and these financial advisers. These people thought that this was good. They wanted more money to entertain clients. "You know how we are about BDA money!!!," said one of them, with three exclamation points, so you know how he was about it. (He was in favor of it. "BDA" stands for "business development allowance," i.e., client-entertainment money; "PLA" stands for "Portfolio Loan Account.") Now, for myself, I can imagine few crueler punishments than being told to go spend a thousand bucks on taking clients out to dinner and a Celtics game, but that is one of many reasons that I'm not a retail financial adviser.