Two complex managers from the Smith Barney side of the Morgan Stanley Smith Barney retail-brokerage venture began new jobs at competitors this week.
J.P. Morgan Securities, the former Bear Stearns Cos. Inc. retail-brokerage unit, confirmed that it has hired Pete Secret to run its 35-person Atlanta office. Mr. Secret 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. Mr. Ardolino will be assigned to a complex after completing Merrill's development program, according to Selena Morris, a Merrill spokeswoman.
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.
This week, Robert W. Baird & Co. Inc. said it has 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 the two complex managers have left the firm. Last month, she said attrition of the top 40% of advisers that the firm wants to retain was at a historic low.
Darin Maris, head of broker search firm RJ & Makay, said it's not surprising that other firms are occasionally hiring Morgan Stanley Smith Barney managers since so many have been sidelined as a result of the merger. "MSSB has such a deep management bench they can withstand a manager getting picked off here and there,” he said.
Barry Sommers, the chief executive of J.P. Morgan Securities, said 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 offices under their supervision.
The firm does not offer fat recruitment packages, Mr. Sommers said. “Our transition package is considerably lower than anyone else's in the business,” he noted. But he contends that the balance sheet, infrastructure, and product and service range of parent bank holding company
JP Morgan Chase & Co. are attractions for recruits.
Indeed, J.P. Morgan Securities today announced that its first-quarter revenue rose to $109 million, a 15% increase from the first three months of 2009. The company currently employs just over 390 brokers in seven branches (and seven more satellite offices) who oversee about $60 billion of 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 & Co. CEO Jamie Dimon last October targeted 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. Still, 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. Moreover, the firm recruited a net 85 brokers in 2009, making it the strongest recruiting year, inclusive of the Bear Stearns heritage.
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.
Merrill's Mr. Ardolino, a 1986 graduate of Wesleyan University, according to his LinkedIn page, had been 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 Inc. in New York in 1993 and later that year moved to Citigroup Global Markets Inc. and Smith Barney in Shrewsbury, NJ.
Sallie Krawcheck, president of Bank of America's Global Wealth and Investment Management unit, which includes Merrill Lynch, previously headed Smith Barney.
