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Morgan Stanley FA Production Surpasses Merrill Lynch

January 19, 2017

Financial advisors at Morgan Stanley hit a major milestone in 2016, surpassing $1 million in average annual production, the Wall Street journal writes.

The company’s brokers brought in $1.01 million on average in the fourth quarter, compared to $947,000 the year prior, Morgan Stanley said in a conference call with analysts, according to the Journal. That’s also a 46% rise in broker productivity since Morgan Stanley merged its wealth management division with Citigroup’s Smith Barney in 2009, the paper writes.

The gains occurred as Morgan Stanley slashed its number of branches by about a third and its broker force by 13% since 2009, according to the Journal. Earlier this month, the company also dropped two of its eight sales regions as part of a cost-cutting initiative, although it said the move wouldn’t include cuts in support staff.

Nonetheless, Morgan Stanley is still recruiting selectively from its rivals, AdvisorHub writes. Earlier this week the company nabbed the SPM Group, a six-advisor team from JPMorgan that focuses on athletes and the entertainment industry and produced between $3 million and $4 million per year, according to the website.

Fourth-quarter revenue at Morgan Stanley’s wealth unit, meanwhile, rose 6% from the year prior to $3.99 billion, according to the Journal. Its profits rose to $891 million, a 16% gain on the year before, the paper writes.

Morgan Stanley’s brokers aren’t the first to reach the $1 million threshold, according to the Journal. UBS’s brokers hit the mark in 2012 while Merrill Lynch’s advisors surpassed $1 million in 2013 but haven’t hit it again since the middle of 2015.


Average production at Merrill Lynch has been steadily declining since the end of 2015, which the company attributes to a bigger emphasis on training new brokers rather than incentivizing veteran advisors to join from other firms.

Morgan Stanley Chief Executive James Gorman said the firm is focusing on its digital capabilities, in part so that it can attract clients with fewer assets, according to the Journal. To that end, the firm has been partnering with technology firms, signing a partnership with data-aggregation startup Addepar last week.

In all, Morgan Stanley has partnered with 10 technology firms since the start of 2016, Reuters writes. Other notable partnerships include Twilio, a cloud-based messaging app, Cloudera, a data-analytics program, and tax-software provider LifeYield, according to the newswire.

Gorman says the firm is still focused on its wealthier clients, however, according to Reuters. “We’ve got to be careful that we are not penny wise and pound foolish,” he said, according to the newswire.

By Alex Padalka
  • To read the Reuters article cited in this story, click here.
  • To read the Wall Street Journal article cited in this story, click here.
  • To read the AdvisorHub article cited in this story, click here.