Morgan Stanley is planning to lay off 2.6% of its workforce, but reps at MSSB are safe. An insider, however, says the brokerage 'won't entirely escape the belt-tightening.'
Morgan Stanley is finished cutting the ranks of financial advisers at the firm's brokerage joint venture, Morgan Stanley Smith Barney LLC, said a spokeswoman for MSSB.
Like virtually every other provider of financial services these days, Morgan Stanley is cutting jobs. Mark Lake, a spokesman for the investment bank, told Bloomberg News that the firm plans to cut about 1,600 jobs at the beginning of next year — or about 2.6% of its total workforce.
But according to a source with knowledge of the situation, financial advisers are not on the chopping block.
“There will be no cuts in the number of financial advisers,” the source said. The business won't entirely escape the belt-tightening, however. “Some positions in wealth management will be eliminated as part of the 1,600 job cuts firm-wide.” The source declined to provide any details about the nature of the positions that would be eliminated.
As recently as the third-quarter analyst's conference call, Morgan Stanley executives were saying the firm would continue to cull low-end producers from its brokerage force. “Greg Fleming [head of retail brokerage], is focused on reducing the number of less productive FAs and that brings some cost savings,” Morgan Stanley chief financial officer Ruth Porat said on the Oct. 19 conference call.
At the end of the third quarter, MSSB employed 17,291 advisers, 752 fewer than it had at the beginning of the year. On average, the advisers produced $747,000 in annual revenue for the firm — lower than the firm's two main competitors, UBS AG and Bank of America Merrill Lynch. Morgan Stanley Smith Barney still employs the largest brokerage force in the country.
