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August 08, 2012 at 08:33 AM
Morgan Stanley appears to be mulling the closure of some wealth-management complexes, trimming support staff and boosting production levels at some branches, according in industry experts and several news reports on Tuesday.
“What is surprising to me is that they have picked this time to cut staff, which risks hurting service levels by putting more decisions into the hands of fewer people,” said Danny Sarch of Leitner Sarch Consultants, in an interview on Wednesday. “I question the timing of this, especially since the advisor population is already stressed because of technology challenges. They risk hurting the service level at the worst possible time.”
A company spokesperson declined to comment on the latest reports about cost-cutting, which follow several rounds of advisor layoffs over the past two years or so.
Morgan Stanley, which is led by James Gorman (left) recently announced a 50% drop in second-quarter profits, which totaled $563 million, compared with profits of $1.19 billion a year ago. (After a negative adjustment of about $1.7 billion, or $1.02 per diluted share, related to a stock conversion, the bank reported a loss of 36 cents a share a year ago, compared with second-quarter earnings of 28 cents a share this year.)
It also said that the number of Morgan Stanley Smith Barney (MSSB) advisors dropped 2% from last quarter and 6% from last year to 16,934.
