Greg Fleming, who led Morgan Stanley's retail brokerage, is leaving the bank as Colm Kelleher was named president of the firm.

Kelleher, 58, who runs the investment banking and trading division, now also gains responsibility for the brokerage, Chief Executive Officer James Gorman told staff Wednesday in a memo, which was obtained by Bloomberg. Shelley O'Connor and Andy Saperstein were named co-heads of wealth management, according to a separate memo, [and report to Kelleher].

Gorman, 57, has cemented his hold on power after five years spent turning the firm around in the wake of the financial crisis. He intends to stay as chairman and CEO for five to seven years, said two people familiar with the matter who asked not to be identified discussing his plans.

Fleming's departure establishes Kelleher as the most likely to succeed Gorman if the CEO leaves earlier than planned. Kelleher was promoted before Fleming decided to leave, and Fleming could have stayed in his current role with Kelleher as his superior, the people said. Gorman now plans to remain CEO for longer than he previously indicated to other executives, one of the people said.
 

'Horizon Beyond'

"The new year always brings change and new challenges and, for me, those challenges will be on the horizon beyond Morgan Stanley," Fleming, 52, wrote in a memo to wealth-management staff, which includes about 15,800 brokers. He praised the division's accomplishments in recent years, quoting Aristotle on the pursuit of excellence.

Fleming, who previously worked with Gorman at Merrill Lynch & Co., joined Morgan Stanley in 2009 and took over the brokerage unit a year later as the New York-based firm was integrating its purchase of Smith Barney from Citigroup Inc. Kelleher has been at Morgan Stanley for more than 25 years.

Fleming is teaching a class on financial markets and corporate law at Yale Law School this semester, and has taught courses there in previous years, according to the school's website.

In October, Gorman promoted two younger executives to new roles, naming Ted Pick, 47, global head of sales and trading, and Dan Simkowitz, 50, to succeed Fleming as chief of the asset management division. Colleagues have said both managers are among long-term CEO candidates.
 
(Editor's note: As of the third quarter 2015, average yearly fees and commissions per FA at Morgan Stanley were $922 million, while average assets per FA were $122 million. The wealth unit included about 18,500 registered reps.)
 
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