Technology rollouts are never easy, a fact of business life that reps at Morgan Stanley Smith Barney LLC are quickly discovering.
Reports from advisers and other sources indicate that the web-based technology platform recently launched by MSSB has been intermittently unavailable and inaccessible. A source at one firm said the system was down for half a workday last week.
The network, called 3D, was announced in April of 2010 as a replacement for the legacy systems then in use at the company. Not surprisingly, the migration of Morgan Stanley and Smith Barney onto a single setup has been a massive undertaking. The brokerage has 17,000 brokers, scores of software applications and systems, and multiple back-office programs.
But with Morgan Stanley chief executive James Gorman intent on bringing pretax profit margins in the wealth management business closer to his often-stated 20% target — the unit was at 11% in Q3 — the migration to a single, more sophisticated technology platform has taken on a greater significance.
Indeed, 3D was meant to consolidate the brokerage's systems into a cohesive whole, at least from a technology standpoint, allowing the firm to realize a much higher level of efficiency and simplified development.
Morgan Stanley has deployed 3D over the last two months. The platform provides advisers with a desktop interface and connects them to MSSB's back-office technology, including account-opening, account-reporting, transaction and other support services.
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“3D is a highly advanced system, and anytime you bring online a system with this level of functionality, there are teething pains," said MSSB spokeswoman Christine Pollak. "We are well-aware of the issues and are making progress fixing them.”
She added that the company has “migrated over the entire Morgan Stanley channel, and in the first half of 2012, we plan to migrate the Smith Barney side,” she said.
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She explained that a big part of the reason the firm has taken a phased rollout approach is to shake out these sorts of issues.
According to a former MSSB broker, the system was down in one Midwest MSSB office for half a day last week.
A former colleague, who declined to disclose his name to
InvestmentNews, told him he had no access to client information and was forced to use tickets and fax machines to execute orders.
The adviser also said that e-mail had yet to be integrated into the 3D system, preventing advisers from automatically accessing information on clients as they called in.
