Morgan Stanley President and CEO James Gorman made several changes in the firm’s executive ranks on Thursday, moving Greg Fleming into the position of global head of wealth management. Fleming will remain head of the firm’s asset-management business

The changes came exactly two years after the merger between Morgan Stanley and Smith Barney was first announced. As part of that deal, Gorman was made chairman of the joint venture (51% owned by Morgan Stanley), and Smith Barney’s Charles Johnston was tapped as president.

“After successfully steering the integration of the Morgan Stanley Smith Barney JV over the past two years, Charlie Johnston has informed me of his desire to retire from the firm at the end of 2011 …,” Gorman said in a memo. “With the integration on track and the return of the retail investor to the markets, driving increased client activity – Charlie believes it is the right time to make this change.”

Johnston will now serve as vice chairman of MSSB for the next year, “where he will be focused on building and strengthening relationships with key financial advisors and wealth management clients, while continuing to support the senior leadership team of MSSB through this transition period,” Gorman stated.

Fleming is “ideally suited now to build on the tremendous momentum in our wealth management business. He brings vast experience and a proven record of leadership to this role,” explained Gorman in the memo.

Gorman joined Morgan Stanley in early 2006 after leading the wealth-management group at Merrill Lynch. Fleming became head of investment management for Morgan Stanley in early 2010, after serving as the president and COO of Merrill.

“Fleming has done a good job at executing and tweaking the asset-management unit and turned it around,” said Mark Elzweig, an executive search consultant, in a phone interview.

With the stock markets doing well and investors fairly optimistic in 2011, “This makes it an ideal time for Morgan Stanley Smith Barney to focus on increasing the profitability of its steady-Eddie, relatively low-risk private client business,” shared Elzweig.

It’s also natural for an executive like Gorman to work with and entrust an important role “to someone he has worked with before and has confidence in at the executive level.”

Fixed Income

Another change announced in Thursday’s memo was the appointment of Chief Risk Office Ken deRegt as head of fixed income.

“While we have started to see some progress, there is more we can do to ensure the best execution of the strategy,” Gorman explained.

Jack DiMaio, formerly head of interest rate, credit and currency trading “has decided to leave the firm and return to the buy side, where he worked for six years prior to joining Morgan Stanley in 2009,” Morgan’s CEO and president added.

With deRegt assuming a new role, Keishi Hotsuki was tapped to serve as interim chief risk officer.

“We believe we have the right people in the right roles to build on our current momentum, and I hope you will join me in congratulating these individuals along with the other members of our management team who have assumed new or expanded roles in 2011,” concluded Gorman in the memo.

Morgan Stanley plans to announce its fourth-quarter and full-year earnings on Jan. 20.

On Jan. 4, Morgan Stanley named Jim Rosenthal, the bank's head of technology, as chief operating officer, according to an internal memo sent out Tuesday and confirmed by a spokesperson.

Rosenthal, 57, has been responsible for merging Morgan Stanley and Smith Barney's technology and systemsunder the joint venture created by the two banks in 2009. The combined advisor force of this joint venture now includes about 18,100 financial advisors who manage $1.6 trillion in assets.