As you probably heard, Morgan Stanley will be moving to a level compensation approach for its 401(k) advisors.

So this means it will do away with commission payments and finder’s fees (for recommending record-keeping vendors) for advisors, in favor of a level fee based on a plan’s assets.

Morgan Stanley’s policy is expected to go into effect “over the next few weeks,” Merrill Lynch had previously announced that it would go with a level-fee arrangement for 401(k) advisors.

Even with the fiduciary rule being delayed, this makes sense for the time being. Since they did all the legwork to comply with the new rule, Morgan Stanley doesn’t want to stop the reform dead in its tracks and wants a compensation system that wont conflict with that delayed rule or any other rule that comes down the pike. The only problem is that this hasn’t been the first attempt over the years for a broker-dealer to overhaul their compensation system for retirement plans and/or IRAs.

Unless other broker-dealers join this payment system route, don’t be surprised that brokers like Morgan Stanley get enough complaints from their brokers to go back into the varying payment system that previously existed.