Smith Barney Lost Over 500 Brokers In Recent Weeks -Sources
09 Marzo 2009 - 10:01PM
Dow Jones News
Citigroup Inc.'s (C) Smith Barney unit lost more than 500
financial advisers over the first seven weeks of 2009, many of
which were lower-producing brokers, according to recruiters.
Many of these departures included advisers that didn't receive a
retention package from Smith Barney and Morgan Stanley (MS), and
who generated less than $500,000 in fees and commissions over the
past year. In January, the two firms agreed to form a joint venture
to be called Morgan Stanley Smith Barney, which will have over
20,000 brokers.
Many brokerage firms are losing advisers looking to recover lost
wealth from plunging company stock prices, and recruiters say Smith
Barney's attrition rate is higher than the normal historic average
for the firm. Many of the brokers who left Smith Barney had already
planned to leave the firm prior to the announcement of the tie-up
with Morgan Stanley. Concerns over Citigroup's falling stock price,
the potential for more government intervention, and further
uncertainty surrounding the company fueled these departures.
"Most of the people who will leave have already left. I don't
think we will continue to see as many people leaving," said Bill
Willis, a recruiter with Willis Consulting. Smith Barney is a
client of Willis Consulting.
Firms such as UBS Wealth Management US, a unit of UBS AG (UBS),
were the beneficiaries of Smith Barney's recent losses.
UBS poached a large number of Smith Barney brokers early this
year with a signing bonus that some advisers felt was just too good
to pass up. In some cases, brokers were offered about 250% of their
production.
Darin Manis, chief executive of RJ & Makay, said regional
brokerages such as Raymond James Financial Inc. (RJF) and
Oppenheimer Holdings Inc. (OPY) also have attracted advisers from
Smith Barney and larger competitors.
InvestmentNews earlier Monday reported Smith Barney's high
attrition rate.
-By Brett Philbin and Annie Gasparro, Dow Jones Newswires;
201-938-5393; brett.philbin@dowjones.com