UPDATE: Greg Fleming Leaving Morgan Stanley
(Adds details on Fleming’s career and on new posts for other executives.)
Greg Fleming, the president of Morgan Stanley’s industry-leading wealth management division, is leaving the company to “pursue other opportunities,” Chief Executive James Gorman told employees Wednesday afternoon.
Colm Kelleher, who leads Morgan Stanley’s institutional and trading businesses, will be sole president of the bank, including its wealth management businesses, Gorman wrote in an internal memo. Kelleher is a Morgan Stanley veteran who has run line businesses and served as its chief financial officer, but does not have retail brokerage experience.
In a separate memo, Kelleher and Gorman said wealth management will be co-headed by Andy Saperstein and Shelley O’Connor, both of whom will report to Kelleher.
view: Morgan Stanley Memo
O’Connor has been head of “field management,” jargon for the company’s almost 16,000 brokers, since 2014. Saperstein, a longtime colleague of Gorman and a former head of the field and of retail investment products, has been co-chief operating officer of Morgan Stanley’s institutional businesses since last year.
The changes appear to reflect Gorman’s dissatisfaction with Fleming, who is 52, and was touted last year in “The Wall Street Journal” as a potential heir apparent to Gorman.
A source at the firm who has worked closely with Fleming said he is leaving voluntarily because he realizes he is not in the running to head the company, given that Gorman is only a few years older. The announcement came the same day as a board meeting in which directors gave their support to Gorman for the foreseeable future by consolidating operational power with Kelleher, who is a few years older than Gorman, according to a person familiar with the plan.
Gorman has made a bigger bet than any other major U.S. executive on wealth management, purchasing Citigroup’s Smith Barney to create the biggest retail brokerage in the world, as measured by number of advisors.
Under Fleming, the division’s pretax profit margin has jumped to 23% from the single digits. However, Gorman may have been impatient with the time it was taking Fleming to build a vibrant “liabilities” business by selling loans and other debt products to wealthy investors and by using their bank deposits to cheaply finance operations.
The fate of Fleming may have been telegraphed last year when he relinquished his title as president of asset management to Dan Simkowitz in order to focus solely on the wealth businesses. Fleming, like Gorman, was a former executive of Merrill Lynch and began his career as an investment banker.
Gorman hired him in 2009 to run wealth and asset management as he was trying to steer Morgan Stanley out of the shambles of the financial crisis.
Separately, Gorman announced that Chief Operating Officer Jim Rosenthal will keep that title and assume a new role in wealth management overseeing development of digital products and technology for clients and advisors.
In another move at the New York-based investment bank, human resources head Jeff Brodsky will now report directly to Gorman. Morgan Stanley has embarked on a major cost-cutting campaign, focused on reducing overhead in its volatile fixed-income trading businesses.