It's official — Smith Barney is no more.
Morgan Stanley announced today that it has renamed its U.S. wealth management business Morgan Stanley Wealth Management, dropping the Smith Barney name from the joint venture it co-owns with Citigroup Inc.
“The Smith Barney name stood for investment excellence for three-quarters of a century, and Morgan Stanley Wealth Management will provide the first-class service that has distinguished Morgan Stanley as a firm for more than 75 years,” Morgan Stanley chief executive James Gorman said in a statement. “Today, as we move forward under one name, we are culminating a three-year effort to integrate two outstanding franchises.”
Morgan Stanley launched a new Smith Barney-less advertising campaign today.
The ash heap of history is littered with the names of venerable brokerage houses either subsumed into other firms or driven out of business by financial crises. Lehman Brothers Holdings Inc. and Bear Stearns Cos. Inc. are the most recent examples.
Smith Barney was one of the more recognized names on Wall Street for many years. Anyone over 40 likely remembers the firm's 1980s ad campaign in which actor John Houseman intoned in his best blue-blood accent “[Smith Barney] makes money the old-fashioned way — they earn it.” (See video below)
The firm was formed by the merger of Charles D. Barney & Co. and Edward B. Smith & Co. in 1938. Both companies were formed in the 19th century. Jay Cooke & Co., the predecessor firm to Charles D. Barney & Co, was the first brokerage to confirm securities transactions with clients via telegraph. It collapsed in the panic of 1873 because of exposure to railroad stocks.
Morgan Stanley recently negotiated terms with Citigroup under which it will buy out the rest of the joint venture the two banks formed in 2009. It now owns 65% of the business.
Even after its demise, the Smith Barney name is still a valuable asset, said Brad Hintz, a banking analyst with Sanford C. Bernstein & Co. Inc.
“Hasn't anyone in banking taken a marketing course?” he asked. “Procter & Gamble doesn't have just one brand of soap and Nabisco doesn't have just one cookie brand. Wall Street's willingness to shed brand names is curious.”
The Smith Barney name isn't going away entirely, said Morgan Stanley spokesman Jim Wiggins. The broker-dealer designation for Morgan Stanley Wealth Management will remain mssb.htm" title="http://topics.investmentnews.com/companies-and-associations/morgan-stanley-smith-barney-mssb.htm">Morgan Stanley Smith Barney LLC and the name will still appear on customer statements and trade confirmations, he said.
Judging by the recent resurrection of the E.F. Hutton brand, maybe we haven't seen the very last of Smith Barney in the marketplace either.
Classic John Houseman commercial for Smith Barney