Mega-branch managers latest to leave MSSB

Two branch complex managers from the Smith Barney side of the Morgan Stanley Smith Barney retail-brokerage venture began new jobs at competitors last week.

J.P. Morgan Securities, which largely comprises the former retail-brokerage unit of The Bear Stearns Cos. Inc., confirmed that it has hired Pete Secret to run its 35-person Atlanta office. He joined Smith Barney in 1993 and became manager of its Atlanta Pinnacle complex in March 2006, according to his LinkedIn page.

Bank of America Merrill Lynch recruited Peter Ardolino, who had been a Morgan Stanley senior vice president and complex manager in southeastern Pennsylvania and New Jersey.

He will be assigned to a complex after completing Merrill’s development program, according to Selena Morris, a company spokeswoman.

Both Mr. Secret, who will oversee about 35 brokers in Atlanta, and Mr. Ardolino are non-producing managers.

The moves continue a shakeup of the managerial class at Morgan Stanley Smith Barney LLC, which has dealt with redundancies in its brokerage force of about 18,000 by reducing the duties of many branch and complex managers.

Since the merger with Smith Barney was announced in January 2009, more than 15 complex managers — mostly from the former Citigroup Inc. unit — have exited the company, said Danny Sarch, a recruiter and blogger for InvestmentNews, who has arranged some of the deals.

Last week, Robert W. Baird & Co. Inc. said that it hired David Perez, a 23-year veteran of Smith Barney who managed several branches in Oregon, to open a Baird office in Portland.

Last month, Morgan Stanley sued Kevin Whitehead, who had overseen six branches in its St. Louis complex, to prevent his immediate move to become a complex manager at Wells Fargo Advisors LLC.

Christine Pollak, a Morgan Stanley Smith Barney spokeswoman, confirmed that Mr. Secret and Mr. Ardolino have left the firm.

Last month, she said that attrition of the top 40% of advisers that the firm wants to retain was at a historic low.

Barry Sommers, the chief executive of J.P. Morgan Securities, said that top managers such as Mr. Secret are attracted to smaller retail operations in part because they have direct access to management and “can make a difference” in raising revenue at smaller operations.

The firm doesn’t offer fat recruitment packages, Mr. Sommers said, but the balance sheet, infrastructure, and product and service range of parent company JPMorgan Chase & Co. are strong lures. “Our transition package is considerably lower than anyone else’s in the business,” he said.

J.P. Morgan Securities, which last week said that its first-quarter revenue rose 15% to $109 million from a year earlier, employs just over 390 brokers in seven branches and seven satellite offices who oversee about $60 billion in client assets.

Their production is about 65% commission-oriented and 35% fee-based, Mr. Sommers said.

The numbers are similar to what they were when JPMorgan Chase chief executive Jamie Dimon last October set a goal of having 1,000 “top, top, top” brokers.

That qualifier explains, to some extent, why the firm is moving slowly and selectively, Mr. Sommers said.

His brokerage force includes Mr. Dimon’s father, who previously worked at Merrill Lynch, and former Bear Stearns chairman and chief executive Alan “Ace” Greenberg.

The firm recruited a net 85 brokers last year, making it the strongest recruiting year, inclusive of the Bear Stearns heritage, Mr. Sommers said.

In the near term, J.P. Morgan Securities is moving into a larger space and is about to bring on more brokers in Palm Beach, Fla., Mr. Sommers said.

This year, the unit hired Michael Maron from UBS AG to open an office in White Plains, N.Y., to serve Westchester County and Connecticut.

In February, it recruited Morgan Stanley’s Robert Martensen to expand a six-person office in Newport Beach, Calif.

Mr. Secret, a 1993 graduate of Palm Beach Atlantic University in Florida, according to his LinkedIn page, replaces Damion Carufe as regional manager in Atlanta. Mr. Carufe will remain with the office as one of its largest producers, Mr. Sommers said.

Mr. Ardolino, a 1986 graduate of Wesleyan University, according to his LinkedIn page, was based in Smith Barney’s Berwyn, Pa., branch.

His complex last year is believed to have produced about $40 million in revenue, Mr. Sarch said.

Mr. Ardolino began his brokerage career at Lehman Brothers Holdings Inc. in 1993 and later that year moved to Citigroup Global Markets Inc. and Smith Barney in Shrewsbury, N.J.

Sallie Krawcheck, president of Bank of America’s Global Wealth and Investment Management unit, which includes Merrill Lynch, previously headed Smith Barney.

E-mail Jed Horowitz at [email protected].