As Congress rakes the heavyweights of the financial world over the coals for their use of government money to pay executive bonuses, it seemed only a matter of time before the spotlight was turned on financial advisors’ retention packages.

“There’s a perception that brokers make a lot of money. To offer them more money to stay in their seats isn’t going to be taken well,” says industry recruiter Mickey Wasserman.

The Huffington Post yesterday posted audio of Morgan Stanley co-chairman James Gorman on a conference call with brokers discussing their anticipated recruitment packages under the joint venture with Smith Barney. Perhaps recognizing the potential for a PR backlash, Gorman urged brokers not to call their “retention award” a “bonus.” “It recognizes the importance of keeping our team in place as we go through this integration,” he said.

Gorman also confirmed that the award would be based on 2008 full-year production. “You should be clapping because frankly that is a very generous and thoughtful decision that we have made,” he said. Gorman added that they could have easily chosen to base the award on 2009 numbers, as the deal isn’t scheduled to close until at least the middle of the year. “It clearly would’ve been cheaper to have done it off ’09 but we think it is the right thing to do,” he said about basing the award on ‘08 numbers. Gorman also confirmed that Morgan Stanley and Smith barney brokers would receive the same awards.

Wasserman believes the firms need to do a better job of characterizing retention and recruitment packages. “When a broker moves from one firm to another or stays with a firm, Wall Street sees it as an investment. They’re maintaining or buying assets. It’s a way to grow quickly. It’s not a bonus, it’s an investment,” he says.

Gorman said he had increased the capacity of his email box to accommodate all the emails from advisors on this issue, and said that final details of the retention packages would be released by the end of February.

*For more information see "Bankers Grilled Before House Finance Committee on TARP Funds."