As Morgan Stanley (MS) continues to cut costs and find other ways to boost results, its rivals are picking up departing branch managers and advisors.
Janney Montgomery Scott said it hired Jeff Smith, who used to serve as a nonproducing manager of Morgan Stanley Smith Barney’s branch in Alexandria, Va., as branch manager of Janney’s office in Washington. The 20-year industry veteran will be responsible for leading the firm’s expansion in the Capital region and will report directly to regional manager James Dornan.
“Jeff is a highly regarded and proven leader, and we’re looking to his experience and insight as we continue to build within our existing geographic footprint,” said Jerry Lombard, president of Janney’s Private Client Group, which includes 734 financial advisors with $54 billion in assets under management. “The D.C.-metro area is a logical expansion point for Janney right now, and we’re excited to have Jeff on board to lead those initiatives.”
MSSB is trimming management and the number of branch complexes from 118 to 86. It also plans to decrease the number of nonproducing managers from some 150 to 85, but also to boost the number of producing branch and resident managers by about 50 in each group. (These figures were first reported by FundFire, a Financial Times news service.)
In July, the number of MSSB regions was cut to 12 from 16, after decreasing it to 16 from 19 in December.
Earlier this month, recruiter Danny Sarch questioned the timing of MSSB’s restructuring. “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 Sarch of Leitner Sarch Consultants, in an interview with AdvisorOne. “I question the timing of this, especially since the advisor population is already stressed because of technology challenges.”
In July, Morgan Stanley, which is led by James Gorman (left), reported 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 MSSB advisors dropped 2%, by roughly 1,000, from last quarter and 6% from last year to 16,934.
On Thursday, Wells Fargo Advisors (WFC) said its traditional employee-broker channel picked up several MSSB reps, including the Burns/Fleming Group , which joined WFA with about $146 million in assets in Birmingham, Ala.
In New York, Cynthia Colin joined Wells’ Park Avenue branch from MSSB with some $154 million in assets and Steve Freidin and Larry Malles came on board WFA in Lake Forest, Ill., from MSSB with some $110 million in assets.
In June, Wells Fargo Advisors added Michael Prat from Morgan Stanley Smith Barney in New Orleans (with about $250 million in AUM) and the Drowos Group in Boca Raton, Fla., from MSSB with some $200 million in assets.
Wells Fargo’s employee channel included 10,913 advisors as of June 30, down from 10,987 in the previous quarter.
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