Morgan Stanley Narrows Recruiting-Attrition Gap, Hires $5 Mln UBS Duo
Morgan Stanley is close to reversing the net outflow of financial advisors experienced in recent years, and now considers its net recruiting number “a real important metric,” according to a top executive.
“Historically, we’ve sort of been losing net a couple of hundred FAs a year,” Chief Financial Officer Jon Pruzan said at a Barclays financial services industry conference on Wednesday. “We’ve been losing…assets and revenues, and generally, those things sort of start us in the year at a detriment. What we’re seeing this year is net recruiting is sort of much closer to zero.”
Still the largest wirehouse by broker count, Morgan Stanley reentered the recruiting market selectively last year.
Anecdotally, Pruzan said, the firm is hiring advisors with bigger books of business than in the past. Recruits this year were producing 50% more twelve-month revenue at their former firms than were Morgan Stanley brokers who left, officials said in earlier presentations.
”They’re bringing more of their assets with them, and when they get on our platform, we’re seeing them grow their assets probably faster than they could have at other places,” Pruzan asserted.
In a previously unreported move, Morgan Stanley two weeks ago reached into UBS to hire New Jersey advisors Gerald Crum and Darren Hugo. They were producing about $4.8 million on over $500 million of credited assets, according to three people familiar with their book of business.
Crum referred calls to a Morgan Stanley spokeswoman, who confirmed their arrival along with two client associates and a wealth strategy associate. Crum and Hugo, who moved from UBS’s Florham Park branch to Morgan Stanley’s Harding branch near Morristown, have worked together for two decades at Prudential Securities, Smith Barney and an earlier four-year stint at Morgan Stanley, according to their BrokerCheck records. They had been with UBS since April 2009.
A UBS spokeswoman declined to comment on their departure.
Morgan Stanley spokespeople would not comment on the total or net number of advisors hired this year, but the firm has been active this summer, despite the work-from-home constrictions of the pandemic.
Last week it recruited a pair of RBC Wealth Management advisors in Long Island who were producing close to $8 million. In July, it lured a $10-million duo from J.P. Morgan Securities in Miami and reached into Merrill Lynch for a $2.3-million producer in Florham Park and a three-advisor team in Atlanta that was generating $2.9 million.
In June, Morgan Stanley attracted a family team of three advisors from J.P. Morgan in southern California who were generating $3.3 million, and a UBS branch manager in New York City.
“Net recruiting is a real important metric,” Pruzan said at the Barclays conference, reversing Morgan Stanley Chief Executive James Gorman earlier admonitions that brokerage firms lose money, or, at best, break even when spending heavily to recruit experienced advisors.
“We expect again [that] Morgan Stanley is going to become a destination of choice for the FA population.”