Behind the defection infection at MSSB

Recent exits by some top teams underscore the discontent with the new regime

Jul 22, 2012 @ 12:01 am

In the near future, the Smith Barney name will disappear below the horizon, following its culture, which has long been swallowed up within Morgan Stanley. The final Smith Barney offices recently converted to the new “3D” technology, while senior management apparently is planning another round of layoffs and consolidation.

The trade press continues to report on large defections from Morgan Stanley Smith Barney LLC. This diaspora may be a result of the culture change or possibly a decrease in service levels to the adviser. Or maybe senior managers have failed to show an understanding of what their own advisers do every day.

In the near future, the Smith Barney name will disappear below the horizon, following its culture, which has long been swallowed up within Morgan Stanley. The final Smith Barney offices recently converted to the new “3D” technology, while senior management apparently is planning another round of layoffs and consolidation.

The trade press continues to report on large defections from Morgan Stanley Smith Barney LLC. This diaspora may be a result of the culture change or possibly a decrease in service levels to the adviser. Or maybe senior managers have failed to show an understanding of what their own advisers do every day.

PRICE METRICS SYSTEM

For example, built within the new technology is a sophisticated price metrics system. It analyzes typical fees and commissions charged to clients all over the country.

By all accounts, it is a useful tool. But picture this scenario: Joe Adviser gets a referral from his attorney friend Mary about a big estate liquidation. They feel there's a good chance that the family will establish a long-term relationship with Joe.

Mary tells Joe, however, that he needs to discount the initial trades severely to win the business. That discount gets rejected by the price metrics analytics. Attempts to override the system with human beings also fail. In a culture where you have watched colleague after colleague disappear, saying no is easier than saying yes.

MSSB spokesmen all say the unit has a robust recruiting pipeline and is bringing in more production than it is losing. Publicly, they tell everyone to stay calm, that all is well with the conversions, with the new systems, with the culture. Picture Kevin Bacon at the end of “Animal House” screaming: “All is well!”

Visit investmentnews.com/ section/fromtheheadhunter for more from The Headhunter blog.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

Fireside chat with new firms at Fuse

Fuse continues to attract new fintech firms to the event every year. Hear directly from the newcomers of Asset-Map and Quik! as to why they chose to attend.

Video Spotlight

Are Your Clients Prepared For Market Downturns?

Sponsored by Prudential

Video Spotlight

Path to growth

Video Spotlight

Path to growth

Latest news & opinion

What not to say to clients when the markets drop

Here's what advisers should steer clear of saying the next time stocks turn downward.

SEC bars former rep for alleged share price manipulation

George Thoreson tried to keep penny stock's price high to enable Nasdaq listing.

Nevada fiduciary law raises concerns among retirement professionals, brokerage industry

Critics complain that it conflicts with ERISA and SEC rules and has potential to spur other states to pass their own version of a fiduciary rule.

A special need for financial advice

Advisers don't have to be experts to help special needs families get a jump on lifelong planning.

Broker-dealers and RIAs at loggerheads over fiduciary rule delay

Companies and groups weighing in with comment letters have vastly different viewpoints on the delay's potential impact.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print