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Morgan Stanley (MS) loses heavy-hitting ($2.5B in client assets) financial adviser Rebecca...

Morgan Stanley (MS) loses heavy-hitting ($2.5B in client assets) financial adviser Rebecca Rothstein and her team to BAML. Frustrated with technology issues and the culture clash resulting from the MSSB merger, a number of major rainmakers have exited Morgan this year.
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  • Sensible Investor
    , contributor
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    There are no surprises here. Morgan Stanley failed abysmally with Dean Witter, losing 3,000 brokers in the process, and taking the shares from 107 to 8 in the process from 2000 to 2008. Then, MS doubled down on failure by purchasing 51% of Smith Barney. Note that they are so stretched financially that they can't raise the dividend, pay their employees bonuses, or retain brokers. In one publicized case, the firm lost a $2 billion broker and James Gorman referred people to Greg Fleming, an investment banker with no brokerage experience, who is running the show. If people learned anything from Vikram Pandit's departure at Citi, it's this-Morgan Stanley management is not the right fit for any business.

     

    I suspect that more brokers will leave Morgan Stanley, as they realize that the firm really can't afford the brokerage. If they can't raise the dividend and buy the rest of Smith Barney, then how can they possibly tell clients and brokers that their firm is a good place for client money? The fact that Gorman refused to get involved with dispirited brokers shows a lack of seasoning and common sense, both of which are needed to succeed in a competitive brokerage landscape. The firm needs a charismatic visionary, not a sourpuss who tells the very backbone of his firm to leave if they don't like it at Morgan Stanley. No, the CEO needs to leave, because MS isn't competitive or client centric. If the board cares about clients, then they will find a true leader, rather than someone who can't focus on the big issues.

     

    Meanwhile, the brokers can do better elsewhere, especially at Wells Fargo, which has a bank, and JP Morgan which has a saavy leader. Don't forget that if Morgan Stanley is straining to meet basic needs of their clients, shareholders and employees, then find a firm that isn't so disfunctional. That's what some smart brokers are already doing.
    22 Oct 2012, 07:13 PM Reply Like
  • bdaught
    , contributor
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    I just left MS last week for Raymond James, which has a culture that is client centric and advisor supportive. Remember that when you are a small part of a bank, you are just that, a small part of a bank. At RJA time, talent and treasure is devoted to a culture where the client comes first. RJA is celebrating its 50th anniversary and has been profitable for 98 straight quarters. RJA's last loss was when Tom James in Oct 1987 decided to keep the trading desk open to serve the clients as opposed to closing the desk in order to avoid a loss. There is a Luke Skywalker vs Darth Vader feeling about the before and after atmosphere at the two firms.
    23 Oct 2012, 05:45 AM Reply Like
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