Morgan Stanley, Meet Smith Barney…Play Nice, Boys.

“Meet the new boss.  Same as the old boss”
– The Who, Won’t Get Fooled Again

The Morgan Stanley Smith Barney (MS) experiment is underway.  According to the AP, not much will change to start with, other than new business cards and a new phone greeting from the receptionist.

The cultures of these two white shoe firms are polar opposites; one is arrogant, the other is really, really super-arrogant…I wonder how they’ll co-exist…

I also wonder if they will run those cheesey “We’re Stronger than Ever” ads that the Wells Fargo/ Wachovia (WFC) milkshake ran upon the completion of their merger rescue. 

The Smith Barney cats that got screwed out of their Citigroup (C) options are receiving stock grants from the new overlord.  I still think the defections to the independent platform will be legion. 

Many of my colleagues at the big firms are of the opinion that a lower payout was fine, as long as they got marketing support and the ability to participate in IPO’s for their clients.  Well, there haven’t really been any initial public offerings of late, and the last year in which there were (2007), the retail guys didn’t even see ’em.  The hedge fund clients of the wirehouse firms took the lion’s share of the better deals.

The combined firm will start off with around 18,500 brokers/advisors that serve 6.8 million households.  Morgan Stanley gets a 51% stake, but if I know John Mack, it won’t be long before he exercises his option to grab the rest.  Citi’s Vikram Pandit will be, how you say, otherwise occupied anyway.

Good luck, MSSB reps!

Full Disclosure: I currently manage accounts that are long MS and WFC.  Do not trade based on anything you read here, see my Terms & Conditions page for a full disclaimer.