'Major loss' as big L.A. adviser leaves Morgan Stanley for Merrill Lynch

Rebecca Rothstein, legacy Smith Barney adviser, jumps ship; No.2 on Barron's list

Oct 22, 2012 @ 3:51 pm

By Andrew Osterland

Rebecca Rothstein, one of the nation's most successful financial advisers, left Morgan Stanley Wealth Management last Friday to join archrival Merrill Lynch Wealth Management.

Ms. Rothstein, a legacy Smith Barney adviser who joined Citigroup Global Markets Inc. in 1999, managed “approximately $2.5 billion” in assets, according to information released by Bank of America Merrill Lynch. The firm did not disclose her production levels with Morgan Stanley.

Ms. Rothstein was not available for comment.

So far in October, InvestmentNews has tracked eight moves by Morgan Stanley advisers to other firms. As a group, they managed $9.5 billion in assets.

Ms. Rothstein, who was No. 2 on the Barron's list of America's top 100 female financial advisers for the last three years, has also been a perennial member of Barron's broader top advisors list.

“If you were to ask Greg Fleming for a list of five advisers he didn't want to lose, she would have been on it,” said Danny Sarch, president of Leitner Sarch Consultants Ltd. Mr. Fleming, a former president of Merrill Lynch, now holds that title at the Morgan Stanley unit.

Morgan Stanley spokeswoman Christine Jockle confirmed the departure of Ms. Rothstein but declined to comment further.

“This is a major loss for Morgan Stanley. She is one of the big names in brokerage in Los Angeles,” said Bill Willis, President of L.A.-based recruiting firm Willis Consulting Inc. “Morgan Stanley has lost an anchor tenant in their Beverly Hills office.”

At the end of August, Reuters reported that Ms. Rothstein was serving as a go-between for dozens of top-producing Morgan Stanley advisers and senior management at the firm. The advisers, upset about continuing difficulties with a new technology platform that was fully implemented by Morgan Stanley this year, were reportedly threatening to leave the firm.

Ms. Rothstein is taking 11 Morgan Stanley employees with her to Merrill Lynch's Century City office in Los Angeles. She will also be reunited with Mathew Celenza and Larry DiGioia, two former adviser colleagues in the Beverly Hills office of Morgan Stanley who spent a brief period with Barclays before joining Merrill Lynch in July. They were not on her team at Morgan Stanley, according to Merrill Lynch spokesman Matthew Card, and will remain part of a separate team in the Merrill office.

Along with Ms. Rothstein, two other heavy hitters accounted for the bulk of the assets exiting Morgan Stanley this month. Jonathan Madrigano, a New York City-based adviser managing $2 billion joined JPMorgan Chase Co. and Palmer Murray, another L.A. based adviser managing $4 billion according to Barron's 2011 rankings of top advisers, joined RIA firm Lourd Capital Management.

A spokesman at Lourd Capital declined to comment about the addition of Mr. Murray to the firm. But Morgan Stanley spokesman Jim Wiggins said Mr. Palmer left the firm to become the trustee of a major family account and that his "two partners and a substantial portion of his managed assets" would remain with Morgan Stanley.

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