NEW YORK (Reuters) – Almost two years into its Smith Barney takeover, Morgan Stanley is ~atory wrestling with how to absorb a competing brokerage without alienating the money-composition advisers who are key to its reproduction.
James Gorman, a former McKinsey consultant and Morgan Stanley’s essential executive, is the only major Wall Street director to stake so much of his solid’s future on selling investments and monetary advice to wealthy individuals and families.
Morgan Stanley doubled the bulk of its brokerage business by merging through Citigroup’s Smith Barney in June 2009, gainful .7 billion for a 51 percent pledge and the right to own the total venture by 2014. It’s a wager that brokerage and a still-mending asset management unit will stabilize a firm built up~ the body volatile investment banking and trading.
The strategetics made sense after massive mortgage mercantile-related losses in 2008 sapped investors’ faith in Morgan Stanley. Gorman, who ran Merrill Lynch’s retail brokerage business for five years, is since at a crucial turn in executing his seeing.
Morgan Stanley pursued Smith Barney as being its loyal sales force — a prior Morgan Stanley executive says they were the hardest brokers to get well — and their drive for selling packaged investment products that generate steady fees.
Now Morgan Stanley Smith Barney is weighing a branding make some ~ in. that risks offending those brokers. The gang recently polled clients about a renovated name for the division, and none includes Smith Barney, according to a Dow Jones account.
“For some, it may subsist the last straw,” said Jerry Eberhardt, a 40-year Smith Barney old hand who left in 2009 as coryphaeus of its western division.
Spokespeople at Morgan Stanley declined to remark on the branding issue or esteem executives available.
NEW MANAGEMENT
A branding modify would follow substantive changes Morgan Stanley has already made in the individual investor vocation.
It said in January that Charles Johnston, the maker Smith Barney boss who kept the president’s title at the joint venture, will remove this year at age 57. He’s been replaced ~ the agency of Greg Fleming, a 47-year-sly former investment banker who Gorman recruited in tardy 2009 to oversee Morgan Stanley’s investing. management business.
The pair were colleagues at Merrill, to which place Fleming focused on financial service secure mergers and for a short time served during the time that president before the company’s vent to Bank of America Corp in 2009. He has in no degree managed a retail brokerage business.
His dare now is to keep an estimate over two divisions, with his fortune management focus on lifting productivity amidst the firm’s 18,000 brokers. Morgan Stanley has around 2,500 more advisers and 0 billion other client assets than archrival Merrill Lynch, mete lags it in revenue and productivity.
CUTTING BILLION
He too has to execute Gorman’s word to wrench significant savings from the merger ~ the agency of consolidating technology and closing overlapping branches. That’s led to the exit of scores of branch managers, in a primary manner from Smith Barney.
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