(Dow Jones) Morgan Stanley Smith Barney is launching a pricing plan for fee-based accounts in April that will charge clients based on the level of service provided rather than the product.

Morgan Stanley thinks this change from current pricing procedures will be easier for clients and advisors to understand. ?

"Pricing has evolved as products have evolved," said Jim Tracy, head of Morgan Stanley Smith Barney's consulting group. "The joint venture between Morgan Stanley and Smith Barney gave us the opportunity to look at pricing and create more clarity and simplicity in the advisory business." ?

"We talked about doing this for a long time, and because of the joint venture we were going to have to merge the pricing plans anyway, so it gave us the momentum we needed to do this now," Tracy said.

Morgan Stanley's brokerage joined with Smith Barney's June 1. The merged operation is moving to two different pricing schedules from 15 schedules, and should be more transparent. ??The fees will generally range from 1% to 2%. No client will be asked to pay more for the same thing they are getting now, Tracy said. ??

Wrap accounts, where clients pay a set quarterly or annual fee for a service, are common enough among big brokerages but distinct and explicit levels of bundled services are not.

"We believe this is where the evolution of pricing is headed, and we would like to be a leader in driving this change," Tracy said. "In the end it can still be presented as a wrap fee, there is just more transparency as to what is inside the wrap." ??

One basic example: clients who want to hear from their advisors daily would pay for a higher level of service than those who just want quarterly contact. As another example, a client would pay a higher fee if the advisor is serving as a discretionary manager rather than overseeing a non-discretionary account. The more time and effort the advisor has to put in, the higher the fee will be.

Scott Smith, a brokerage analyst at Boston-based research firm Cerulli Associates, said the new pricing model is typically found only among some independent brokerages. Smith likened the new fee structure to the idea behind unified managed accounts, or UMAs, because of its simplicity and transparency. As more clients move to UMAs, he expects other brokerages to go to this new pricing model. ??

Unified managed accounts are similar to separate accounts, or SMAs, but can hold multiple types of investments. Morgan Stanley Smith Barney has seen year-to-date UMA inflows of 9.1 billion, according to a spokeswoman. ??

Smith said Morgan Stanley is, "looking forward to the future, where everything will be going to UMA-type platforms." ??"It's like going to one set of plumbing, that you can turn off and on when you want, from 20 different ones," he added.

He said clients in the past had been charged separately for use of each of those 20 platforms, making costs difficult for them and their advisers to track.

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