A group of Morgan Stanley Smith Barney's (MS) heaviest hitters - managing tens of billions of...

A group of Morgan Stanley Smith Barney's (MS) heaviest hitters - managing tens of billions of dollars and disgruntled with tech problems - may leave the company, according to sources. CEO Jamie Gorman is aware of the situation and has promised to work on the issue, but a Morgan spokesman plays down the idea anyone is set to walk.

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  • Sensible Investor
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    MS has no business acquiring a brokerage business it cannot afford, and people it cannot support adequately. MS has been in decline for over 12 years, as demonstrated by the share price, from 107 in 2000 to 15, now. The firm also lacks the stability that a bank would offer them, which Wells Fargo has, for example. James Gorman is not an intellectual in the way Jamie Dimon is, and his brokerage head, Greg Fleming, is a former investment banker with no experience in brokerage. If MS cannot afford to buy Smith Barney outright, offer bonuses, or grow their business, then the ONLY option they have is to sell the firm, not add to it. They already blew up the Facebook IPO, lost 3,000 Dean Witter brokers, and then overreached with the Smith Barney joint venture.


    The firm's technology IS weak, and their ability to support the Smith Barney brokerage, both practically and realistically is suspect at best. Rather than buy a bank, they added to their failed Dean Witter shell, and have offered no growth in their dividend, or share price to their shareholders. So yes, if the brokers care about their clients, they should absolutely leave and go to Wells Fargo or a firm with an actual pool of talent that has the capital to support their technology and offer benefits to their shareholders. Meanwhile, the firm needs to find a US buyer, and concentrate on realistic steps, such as finding a competent CEO.
    31 Aug 2012, 06:34 PM Reply Like
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