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January 11, 2017

Morgan Stanley Reorganizes Wealth Management Sales Structure—Memo

by Mason Braswell
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Morgan Stanley
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Comments (6)
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Morgan Stanley Reorganizes Wealth Management Sales Structure

Morgan Stanley is reorganizing its wealth management division, trimming its regional sales structure to six regions from eight as of February 1, according to a memo sent late Tuesday to the firm’s nearly 16,000 advisors.

The investment banking giant, which derived 44% of its revenue and 35% of its profit from its wealth unit in the third quarter, is eliminating its Northwest and New England regions, according to the memo, which was signed by Eastern division head Rick Skae, Western division head Bill McMahon, and Private Wealth Management head Vince Lumia.

The shift is the first major restructuring since Shelley O’Connor and Andy Saperstein took the reins of the business that serves wealthy individuals, families and their businesses from Greg Fleming one year ago and occurs amid a broad cost-cutting campaign orchestrated by chairman and chief executive James Gorman.

The company took pains to assure its brokers that the changes will not directly affect their businesses, in contrast to a restructuring of the branch complex organization in April.

“While the number of regions is decreasing, we are maintaining overall regional staffing levels to ensure that we continue to provide a high level of support to managers and financial advisors throughout the branch system,” the memo said.

Rick Ryan, who runs the New England region, will leave the company “to pursue other opportunities” while Northwest region head Michael Struckman will move from San Francisco to take over a reorganized Southeast region, the memo said.  Ryan, who is based in Boston, has been with the company for his entire brokerage career, which began in 1986, according to the BrokerCheck database.

Timothy P. Byrnes, who has run the Southeast region since February, will assume a new role that the memo did not specify.

Morgan Stanley’s remaining regional managers will continue in their positions, organized under the firm’s existing Eastern and Western division structure. They are Ralph Balzano in the Northeast, Lisa Cregan in the Mid Atlantic; Steve Austin in the Great Lakes; Curt Peterson in the Pacific Coast; and Ron Thacker in the Central region.

Additional announcements about the management structure of branch complexes will be forthcoming, according to Tuesday’s memo.

Morgan Stanley Wealth, the biggest U.S. brokerage firm following its purchase of Smith Barney in 2009, undertook several rounds of management restructuring under Fleming and this year hit the 22% pretax profit margin target outlined by Gorman.

Morgan Stanley last truncated its sales management structure in April 2014, when it slimmed from 12 to eight regions and from four to two divisions. It has, however, been making small tweaks to consolidate branches and specific divisions, such as its consulting group and support personnel, as it seeks to pare back expenses.

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Comments (6)
  • on Jan 11 2017, Walker Texas Broker says:

    The end game is clear;
    reduce “regions” to 1, and centralize all investment and trading to a home office. remove compliance risk from individual offices. make all the brokers official salespeople who just run financial plans for folks.

    > Reply to Walker Texas Broker
    • on Jan 11 2017, NJ Broker says:

      So what will happen to the complexes and their managers?

      > Reply to NJ Broker
  • on Jan 11 2017, diogenes says:

    Every divisional, regional and complex “consolidation” is done for cost containment. It is never sincerely about streamlining. It is about delivering impractical budgets that promise impossible to achieve profits. The branch managers, advisors and ultimately the clients are the ones that suffer. Fewer senior field leaders is akin to closing check-out stands at Wall-Mart. The prices are still good but the service is exactly what you pay for…

    > Reply to diogenes
  • on Jan 11 2017, Planner says:

    I’m still trying to figure out what a regional manager does. When I worked at Morgan Stanley it was to run “sales contests” and intimidate people. 6 sounds like too many. Enjoy.

    > Reply to Planner
  • on Jan 11 2017, Steven Lopez says:

    New England gets the “deep six”….Hmmm, wasn’t that where the bogus Wells Fargoish SBL sales contest took place ?? What an odd coincidence…..

    > Reply to Steven Lopez
  • on Jan 12 2017, Jerry Maguire says:

    This should be a clear message that if you are in production and you are asked to become a manager or if you are a producing branch manager accepting a job with the firm that requires giving up your book is suicide. The odds of anyone having anything close to job security in management are staggering. Staggering against you that is. Don’t let anyone BS you out of your book.

    > Reply to Jerry Maguire

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