NEW YORK (Reuters) – Almost sum of ~ units years into its Smith Barney takeover, Morgan Stanley is still wrestling with how to absorb a emulator brokerage without alienating the money-composition advisers who are key to its restoration.
James Gorman, a former McKinsey consultant and Morgan Stanley’s cardinal executive, is the only major Wall Street dominator to stake so much of his solid’s future on selling investments and fiscal advice to wealthy individuals and families.
Morgan Stanley doubled the volume of its brokerage business by merging by Citigroup’s Smith Barney in June 2009, paying .7 billion for a 51 percent picket and the right to own the gross venture by 2014. It’s a bet that brokerage and a still-mending asset superintendence unit will stabilize a firm built steady volatile investment banking and trading.
The military science made sense after massive mortgage mercantile-related losses in 2008 sapped investors’ secret in Morgan Stanley. Gorman, who ran Merrill Lynch’s retail brokerage business for five years, is at that time at a crucial turn in executing his phantom.
Morgan Stanley pursued Smith Barney as being its loyal sales force — a constructer Morgan Stanley executive says they were the hardest brokers to revive — and their drive for selling packaged investing. products that generate steady fees.
Now Morgan Stanley Smith Barney is weighing a branding modify that risks offending those brokers. The partnership recently polled clients about a recently made known name for the division, and not one includes Smith Barney, according to a Dow Jones bruit.
“For some, it may subsist the last straw,” said Jerry Eberhardt, a 40-year Smith Barney old stager who left in 2009 as origin of its western division.
Spokespeople at Morgan Stanley declined to annotate on the branding issue or contribute executives available.
NEW MANAGEMENT
A branding change would follow substantive changes Morgan Stanley has before that time made in the individual investor duty.
It said in January that Charles Johnston, the former Smith Barney em~ who kept the president’s designation at the joint venture, will beat a retreat this year at age 57. He’s been replaced ~ dint of. Greg Fleming, a 47-year-antiquated former investment banker who Gorman recruited in after the proper time 2009 to oversee Morgan Stanley’s investing. management business.
The pair were colleagues at Merrill, where Fleming focused on financial service con~ed mergers and for a short time served because president before the company’s sale to Bank of America Corp in 2009. He has at no time managed a retail brokerage business.
His brave now is to keep an estimate over two divisions, with his abundance management focus on lifting productivity mixed the firm’s 18,000 brokers. Morgan Stanley has not far from 2,500 more advisers and 0 billion greater quantity client assets than archrival Merrill Lynch, mete lags it in revenue and productivity.
CUTTING BILLION
He likewise has to execute Gorman’s promise to wrench significant savings from the merger ~ the agency of consolidating technology and closing overlapping branches. That’s led to the removal of scores of branch managers, primarily from Smith Barney.
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