Morgan Stanley Smith Barney shuffles retail management team

In an executive switch that creates an opening in its wrap account business, Morgan Stanley Smith Barney LLC has named a new chief operating officer and a new private-wealth-management head. James Tracy, who had run the firm's Consulting Group of financial advisers who specialize in wrap account or managed-money products, is now COO of distribution and development for the U.S. arm of the world's biggest retail broker. Douglas Ketterer, his predecessor in the COO post, has shifted to become head of the approximately 300 “private wealth advisers,” who serve high-net-worth clients, or those with at least $20 million in investible assets. The COO post has been redefined to include fewer direct reports. MSSB, a joint venture in which Morgan Stanley has majority control, has a total of about 18,000 retail brokers. Bank of America Merrill Lynch's unit is the second-largest U.S. broker-dealer, with just over 15,000 brokers. Morgan Stanley is looking internally and externally to replace Mr. Tracy as head of the Consulting Group, the brokerage industry's largest provider of managed-money services, said spokeswoman Christine Pollak. Mr. Tracy, a Smith Barney veteran, served as a sales manager, branch manager and regional director before assuming management posts at the former Citigroup Inc.-controlled unit. Prior to heading the Consulting Group, he led national sales, professional development, marketing and recruiting. Mr. Ketterer joined Morgan Stanley in 1990 in corporate finance and subsequently took posts on the new-business side of investment banking and in product development at the firm's investment management arm. Prior to formation of the joint venture with Smith Barney in June 2009, he led the products group of Morgan Stanley's wealth management business. Both Mr. Ketterer and Mr. Tracy report to Andy Saperstein, head of the U.S. wealth management group. Mr. Saperstein, a former Merrill Lynch & Co. Inc. executive, was recruited to Morgan Stanley by James Gorman, the former head of Merrill's and Morgan Stanley's retail-brokerage businesses. Mr. Gorman is now chief executive of Morgan Stanley.