Client-Facing Wealth Management Staff At Morgan Stanley Will Not Be Hit By Job Cuts

Harriet Davies

11 January 2013

Client-facing staff at Morgan Stanley Wealth Management - will not be affected by the latest round of cuts to hit the bank, a person familiar with the situation said.

The Wall Street-listed firm provides wealth management services in regions including Asia-Pacific.

Morgan Stanley is to reduce headcount at its institutional securities business by 6 per cent, or around 1,600 employees. Around 50 per cent of the job cuts will be made in the US, with the rest falling internationally. They will affect all levels of employees but focus on senior managers.

While no brokers within Morgan Stanley Wealth Management will lose their jobs as a result of the cuts, the unit will be affected to the extent that headcount is reduced among back-office functions across the bank – as some cuts will be made to infrastructure and support roles.

The bank declined to comment on the matter.

The decision to trim headcount further at Morgan Stanley follows some 4,000 job losses at the firm last year, according to the Financial Times. However, the firm is not alone in making big staff reductions and cutting costs – especially within investment banking – due to the sudden turn in market conditions that occurred following the financial crisis. UBS is making sharp job cuts focused on fixed income, while it emerged in December that Citigroup is slashing some 11,000 positions.

Across its business, Morgan Stanley reported net revenues of $5.3 billion for the third quarter last year, down from $9.8 billion a year earlier.

Wealth management results

For Q3 last year, Morgan Stanley Wealth Management reported $239 million in pre-tax income from continuing operations for the third quarter of the year, down from $356 million for the same period in 2011, representing a year-on-year decline of $117 million. The unit, which was rebranded recently from Morgan Stanley Smith Barney, is at the center of chief executive James Gorman’s plans to make the firm less reliant on trading revenues.