MSSB to pare number of complexes

Morgan Stanley Smith Barney LLC is cutting the number of complexes in the brokerage unit to 86, from 118, and nonproducing managers to 85, from 150, according to a report on the FundFire website. MSSB spokeswoman Christine Jockle confirmed the report but declined to comment further. The firm reduced the number of regions in the organizational structure to 12, from 16, last month and clearly plans to cut overhead further. “This kind of cost cutting is typical in challenging markets,” said executive recruiter Mark Elzweig. “[MSSB] is continuing to look for ways to cut overhead and achieve better profit margins.” Morgan Stanley chief executive James Gorman has had a difficult time getting to the 20% pretax profit margin he targeted when he assumed leadership of the company in 2009. Last quarter, the margin was 12%, a 1-percentage-point improvement over the previous quarter. The rocky transition to a new technology platform was completed last month, with the final Smith Barney advisers migrating to the new system. An unidentified MSSB executive quoted in the FundFire story said this was the final reorganization of the combined brokerages. “This will be the structure for the foreseeable future,” he told FundFire. The executive said that the number of producing branch managers will rise and that about 40 additional branches will be consolidated this year. Morgan Stanley is in talks with Citigroup Inc. to buy 14% more of the joint venture that was formed in 2009. [email protected] Twitter: @aoreport