Wirehouse taps former Merrill exec to lead retail brokerage. Morgan Stanley has hired James Gorman away from Merrill Lynch to run its retail brokerage business. He starts next February, and he’ll report to Morgan Stanley’s acting president Zoe Cruz. Until then Ray Harris will continue as acting president and COO of the retail unit.

“James Gorman's depth of experience and expertise are unmatched in the industry, making him uniquely qualified to lead the transformation of Morgan Stanley's retail brokerage business,” Morgan Stanley CEO John Mack says in a press release.

Recent media reports had Gorman short-listed for the job. A couple of senior executives at UBS, Marten Hoekstra and Mark Sutton, were also said to be in the running.

Gorman’s appointment follows hard on a period of infighting at Morgan Stanley that saw a number of high-level departures, including that of CEO Philip Purcell. Last month Mack, a runner-up to Purcell for the top spot a few years ago, got the nod from the Morgan Stanley’s board of directors.

Gorman, who joined Merrill from the consulting firm McKinsey & Co. in 1999, had been head of Merrill’s retail brokerage group since 2001, presiding over a sales force of about 14,000. In June, however, his erstwhile boss Robert McCann took over that job, and Gorman was named head of corporate acquisitions at Merrill, a new position.

The “transformation” Mack refers to is his plan to take the brokerage up-market. Last week the wirehouse began sacking brokers who have more than eight years on the job but generate less than $225,000 in fees and commissions. About 1,000 such reps will get their walking papers by the end of the year, Mack told brokers in a conference call earlier this month. On average, a Morgan Stanley broker advises on about $55 million – a bit more than half the average for Merrill reps, according to a report in the Wall Street Journal. –FWR

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