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Morgan Stanley Grabs UBS Team; Loses Reps to Merrill, Others

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Though rivals continue to poach its advisors, Morgan Stanley (MS) appears able to keep up. And, even though it faces the chance of a credit downgrade, its appeal as a top broker-dealer should hold up, experts say.

Morgan Stanley, Bank of America (BAC) and Citigroup (C) are all facing possible downgrades to their credit ratings by Moody’s Corp., which announced the news in late February. Analysts say that this could complicate reported plans at Morgan Stanley to purchase more of Citi’s interest in the Morgan Stanley Smith Barney joint venture; Morgan now owns 51% of the business.

Could a downgrade also hurt Morgan Stanley’s pull as a recruiter? “The rating agencies blew out their street cred quite a while back with their investment-grade ratings of Enron in 2001 up until four days before the firm collapsed,” said executive-search consultant Mark Elzweig (left), in an interview with AdvisorOne. “Unless the new rating of one firm is dramatically lower than another, most advisors will yawn and shrug it off.”

Advisors tend to focus on a firm’s stock price and the pricing of credit-default swaps, adds Elzweig. “Unless the rating downgrades influence these numbers, I don’t think that it will matter much,” he said.

Moody’s consideration on MS specifically (a three level cut) would be newsworthy, and would look poor vis-a-vis competitors like JPMC, but again, I not sure that after a few weeks it would have any impact on broker recruiting

This week, Morgan Stanley recruited a four-member team with about $6 million in yearly fees and commissions, as well as some $800 million assets under management, from UBS. Meanwhile, the wirehouse firm, led by James Gorman, lost four reps to Bank of America-Merrill Lynch, Raymond James (RJF) and RBC Wealth Management (RY) with a total of about $3 million in production and some $500 million in assets.  

Rick Hughes, Harry Greenberg, Shawn Senior and Daniel Silverberg, who previously did business as the Hughes Senior Group of UBS, joined Morgan Stanley Smith Barney’s Mt. Laurel, N.J. office on Monday. They now report to John Caven, complex manager.

On Thursday, RBC Wealth Management said it lured Scott Karkenny away from MSSB to its Conshohocken, Penn., office. Karkenny has been in the business for more than 20 years; he has about $1.3 million in yearly fees and commissions and some $165 million in assets under management.

“We’re very excited to welcome a veteran of Scott’s accomplishment and stature to RBC Wealth Management,” said Joe Mooney, director of the firm’s Conshohocken branch, in a statement.

“His dedication to best serving the needs of his clients, as well as his industry knowledge and experience, make him a great cultural fit for the firm and the Conshohocken office.”

Merrill Lynch lured the former MSSB advisor Frederick Siyufy to its office in The Villages, Fla., on Monday. Siyufy has had annual production of more than $1.1 million and AUM of $133 million.

Ex-Morgan Stanley reps John Waszolek and Eric Waszolek joined the Scottsdale, Ariz., office of Raymond James & Associates on Tuesday. The father and son have managed $200 million in client assets and had more than $800,000 in annual production.

“It’s an honor to welcome John and Eric to Raymond James,” said Tash Elwyn (right), Private Client Group president of RJ&A the traditional employee broker-dealer of Raymond James Financial, in a press release. “Their talent and experience will be an asset to our firm. They share our firm’s values of independence and conservative management and will enhance our ability to deliver excellent service and professional advice to our clients.”

“I was looking for a firm with a culture that recognizes and appreciates its employees and respects its shareholders’ investment,” said John Waszolek. “With conservative management and 96 consecutive quarters of profitability, I believe Raymond James is the right place for me and my clients.”

John Waszolek, a 37-year veteran of the financial services industry, began his career with Merrill Lynch in Chicago. In 1979, he moved to Scottsdale, where he worked with PaineWebber/UBS for 30 years. He joined Morgan Stanley in 2009, prior to its merger with Smith Barney.

Eric Waszolek has been his father’s partner for four years, working him at UBS and MSSB. He and his father now report to Tom LaPorte, the Scottsdale branch manager for RJA.

Advisor Satisfaction

According to the J.D. Power and Associates 2012 U.S. Financial Advisor Satisfaction Study, Morgan Stanley has some room for improvement in terms of giving its advisors the right mix of technology, client support and other tools.

The J.D. Power’s 2012 U.S. Financial Advisor Satisfaction Study (based on responses of nearly 2,800 employee FAs) found that Morgan Stanley stood below the industry average of 698 with a score of 649.

Edward Jones had a top rating of 900, followed by Raymond James at 864, RBC at 802, and UBS at 730. Merrill’s rating was 688, while Wells Fargo’s was 633.