![]() ![]() Reuters reports that Morgan Stanley Smith Barney had landed veteran wealth management teams that managed more than $4 billion assets at rival brokerages Merrill Lynch and UBS Wealth Management Americas in an effort to bolster its adviser force across the United States. In other words, fewer people are having to work harder.Īs for its strategy of scooping up senior high producing wealth management teams, that seems to be continuing unabated. The number of trainees it took on shrunk from the planned 2,000 to 1,250 this year, and the training programs have been restructured to try and increase productivity. While it talks about “quality, rather than quantity” of financial advisors, the main focus has been on “raising the bar” to entry. Morgan Stanley has shied away from making deep cuts in its wealth management divisions. Wealth management will largely be spared, but it’s getting tougher to break in This could simply be rhetoric to ensure there’s not a perception that Morgan Stanley isn’t falling behind its competitors on pay, but it also suggests that they’re primarily trying to cut costs in back office functions. However, Porat indicated that they would still look to dig deep for those generating revenues: “The way we think about this is we want to drive returns, we want to ensure we can the pay people who are driving returns and we need to make sure that we’re doing all that we can to use those compensation dollars most efficiently,” she said. Bonuses are shrinking, but performers will still be paidĬompensation is sliding at Morgan Stanley – by 36 percent, which is a far higher cut than its investment banking peers – and clawbacks could be on the cards. More people are likely to move out of New York to Morgan Stanley’s operational center in Baltimore. However, it also involves shipping people out to lower cost locations. Inevitably, this means focusing on reducing compensation expenses as well as job cuts. Morgan Stanley’s Office of Re-engineering was created in winter last year and its focus is on "optimizing" the business, namely stripping out costs where it can. Unless you’re in the front office, it’s unlikely that you’ll find work in New York or London Specifically, structured credit and sub-prime securitization are areas where cuts seem likely. Ruth Porat, chief financial officer at the bank, said that certain fixed income employees were “nice to have, but they’re not necessary,” and that it would move “away from complex structured product businesses to high-velocity, flow-oriented products." In the areas where revenues were “most lumpy,” the bank was “being the most aggressive and will be increasingly so," she added. Fixed income will take a hitįICC sales and trading revenues fell by 70 percent to $770 million after a strong first quarter, so it’s not surprising that Morgan Stanley is looking at the structure of this division. Most units are shrinking, however wealth management is expected to grow, but at a slower rate than in the past. In the conference call to analysts yesterday, available on Seeking Alpha, the bank revealed its plans for reductions in headcount and compensation as well as other strategies aimed at trimming expenses. ![]() Morgan Stanley reports a bleak earnings picture, especially in fixed income sales and trading, and says it will trim headcount by another 800 employees, bringing the number of people let go since the end of 2011 to 4,000.
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