Merrill Lynch and Morgan Stanley have stopped paying trail commissions smaller accounts, reports the Wall Street Journal. The two firms join Piper Jaffrey, which already does not pay commissions on accounts less than $10,000.

Merrill has stopped paying brokers commissions on accounts with less than $50,000 in assets. Previously, Merrill's brokers were paid 25 percent of gross commissions on trades more than $500, as well as trail fees of 35 percent of ongoing commissions to mutual funds and other products, reported the WSJ, citing unnamed sources.

Morgan Stanley's brokers were paid 20 percent of gross commissions on trades and 30 percent of gross commissions on asset-based fees on accounts under $35,000. They will now get zero commissions on accounts with less than $35,000. There may be some relief for Morgan Stanley's brokers, however -- the accounts levels are based on household assets rather than individual accounts.

The WSJ reports that rivals Wachovia Corp, American Express Financial Advisors are not planning on cutting commissions for smaller accounts.  

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