Morgan Stanley Merges Dallas Complexes as Cost-Saving Push Continues
(Adds comment from Morgan Stanley spokesman in ninth paragraph and corrects number of complexes to 74 from 70.)
Morgan Stanley Wealth Management is merging its two complexes in Dallas, affecting the oversight of some 300 brokers and signaling that top managers continue to look for efficiencies to satisfy Morgan Stanley CEO James Gorman’s ongoing cost-saving campaign.
Chris Barton, one of the relatively few legacy Smith Barney managers helping to overseeing the biggest U.S. brokerage sales force, will give up the position he has held since the 2009 merger as head of the firm’s Dallas Park Cities offices.
He will assume the position of “sub-complex manager,” aiding Benjamin Kax Fujihara, a Morgan Stanley Dean Witter veteran who had been managing the firm’s Crescent Court complex. The subcomplex role was introduced last year, according to sources at the firm who spoke on condition of anonymity.
The sources and several former Morgan Stanley managers confirmed the change at the Dallas complex.
The consolidation reflects the parent firm’s ongoing crusade to cut costs as part of its Project Streamline program that aims to eliminate $1 billion of annual expenses. When first unveiled some 18 months ago, Morgan Stanley officials said the campaign would not directly affect wealth management, but some structural and branch support cuts were subsequently imposed and pressure remains on senior wealth management officials to pare spending.
Sources familiar with the Dallas complex consolidation said the firm plans to reduce its 74 retail branch complexes to around 50, cutting out layers of management and support along the way.
“We have heard about a reduction, and time will tell whether this is the first off the wave of whether it will just be one at a time,” said one current Morgan Stanley manager who spoke on condition of anonymity.
A Morgan Stanley spokesman said that the company has no specific targets for complex reductions.
“We regularly make changes to our complex network to optimize its performance across a range of measures,” he wrote in an email.
The changes supersede the consolidation of overlapping Smith Barney and Morgan Stanley offices and management that has largely been completed and that has eliminated about 350 branches since 2009. Morgan Stanley as of the end of 2016 had 601 branches, and currently employs just under 16,000 brokers.
The Dallas consolidation follows Morgan Stanley’s announcement earlier this week that it will significantly reduce recruiting of experienced brokers who have traditionally been lured with multi-million-dollar signing bonuses.
Barton, who has been a registered broker for 23 years, had been with Morgan Stanley and Smith Barney for 22 of those years.
In January, Morgan Stanley eased out Bert White, its complex manager in West Palm Beach, Florida, another veteran with Smith Barney roots.
A Morgan Stanley spokesperson said about 45% of its complex managers came from Smith Barney.