MSSB is under siege. And I'm not even going to talk about Facebook. Whoops, it slipped. At the adviser level, the siege begins with the tremendous challenge of a new technology platform being rolled out to all employees. The legacy Morgan Stanley advisers and many legacy Smith Barney advisers are already working off of the new system, called “3D.” This system has had numerous challenges this year with entire business days lost to slowdowns and glitches. The frustration level has been very high and one adviser told me: “The system's name is short for ‘Doesn't Do Diddly.'”
To be fair, those outages have slowed and the challenge in launching such a system should not be underestimated. An IT expert friend of mine told me that the best way to understand the impossibility of doing this perfectly is to think of a new stadium opening up. Apparently, before the stadium opens for business with 70,000 fans in attendance, several thousand people are invited to a party. There is a countdown on the big scorecard where the attendees are deployed at every toilet, urinal, and sink in the building. When the countdown hits zero, everybody flushes, simulating the pressure on the pipes as if it was halftime at a football game. Only then can they be sure that the pipes will work.
Similarly, until there are thousands of advisers, their staffs, and their clients accessing data, putting through transactions, all at the same time, there is no way for IT personnel at MSSB or anywhere else to know whether their systems will work. So, as the final Smith Barney Advisers are brought onto the platform over the next few weeks, it is impossible to know how the system will respond.
That said, the advisers who are already using the system are highly critical of its usability, saying that it typically takes ten clicks to get something done where it used to take two. Operations personnel are not as efficient because their workflow has been slowed dramatically while staffing cuts have cut their numbers to the bone. And the new systems also beget new policy changes which also slow workflow even further and create confusion. For example, accounts are typically grouped together as “households” and many of these legacy households were broken up under the new system. This has caused numerous nuisance charges to be inadvertently charged to smaller accounts which are no longer associated, by either error or design, to larger accounts where these fees would be waived. Advisers have unhappy clients, and branch managers now have unhappy advisers. And with the firm watching expenses carefully, it is more difficult than ever to reverse these charges.
Smith Barney advisers' clients get new account numbers as part of the conversion. At a client friendly firm, the legacy account numbers would be recognized by the new system, automatically, in order to ACAT an account away from the firm, or to simply answer the clients' questions. At MSSB, however, I'm told that an ACAT request using the old account number will be rejected; the new firm or client must manually either call or email MSSB to request the new number.
At the same time, MSSB advisers are watching MS fall to under $13 with the threat of a Moody's credit downgrade looming. Let's summarize, and imagine you are an adviser with MSSB: You're less efficient because of systems, defending your firm's financial strength and stability, and many of your clients are proud owners of Facebook at $38 per share.
Whoops, I slipped again.
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