Time to Shear the Sheep

Two different friends of mine on the wealth management side of Morgan Stanley forwarded this DealBook link to me overnight. One of them said “Oh boy…”

Morgan Stanley wants to see its brokers and advisors (many of them legacy Smith Barney) work more closely with the banking and capital markets side of them firm to increase profitability. In English, that means a lot more products and cross-selling. High fee stuff, complicated stuff, structured stuff, sticky stuff, stuff sold as “exclusive” or proprietary etc.

In Australia, they call this Sheep Shearing Season. James Gorman made a big bet when he bought Smith Barney and doubled down on brokerage. Now its time to monetize those assets and that expanded sales force.

Time to collect the wool from the flock they’ve tended all winter.

Here’s DealBook:

Traditionally, traders and investment bankers think of themselves as the elite of Wall Street and look down on the retail business, seeing it as pedestrian. Yet Mr. Kelleher had a message for the branch managers: His group can work with retail brokers to increase profits at Morgan Stanley…

James P. Gorman, the chief executive of Morgan Stanley, is hoping that its sales and trading unit will work more closely with wealth management to increase lending, better tailor structured products for retail clients and improve collaboration on events like public offerings, company insiders said.

Morgan advisors need only ask their colleagues at Bank of America Merrill Lynch how they’re enjoying this tighter relationship between banking and private wealth.

When brokerage veterans hear the home office talking about “increasing profits” they know exactly where that increase is coming out of – their clients’ accounts.


Morgan Stanley Strives to Coordinate 2 Departments Often at Odds (DealBook)


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