Morgan Stanley execs keep swapping jobs - and it says something important about the future of the firm
On Wednesday, the firm's president of institutional securities, Colm Kelleher, was handed control of wealth management as well. Then-president of wealth management, Greg Fleming, quit the firm.
Morgan Stanley also announced that Andy Saperstein would switch from his current role as co-COO of institutional securities to become cohead of wealth management. Saperstein had previously been in the wealth management division before moving to the co-COO role.
The management shakeout is not the only example we've seen of folks moving back and forth between the institutional securities group - which encompasses traditional investment banking and deal-making as well as capital markets trading and sales - and other parts of the bank.
In March, investment banker Raj Dhanda moved to the wealth management division. He had been coheading the capital markets team within the institutional securities division.
At the time, Gorman said in a memo that the bank was "cross-pollinating key leaders across our major businesses" to build a single firm-wide culture.
In October, Dan Simkowitz moved from his role as cohead of global capital markets to become head of investment management, the firm's asset management division.
Prized divisions
The strategy here is to bring wealth management closer together with the investment bank both culturally and from a business perspective. Institutional services and wealth management are Morgan Stanley's two most prized divisions, but there has been tension between the two units in the past.
He's referring to the 1997 merger between Morgan Stanley, then solely an investment bank, and retail brokerage Dean Witter Reynolds. The two firms had very different cultures.
Then there is the business case for combining.
In December, UBS analysts Brennan Hawken described the "Morgan Stanley story" as "the idea that this could be a wealth management firm connected with a really large, really outstanding equities franchise and investment bank."
UBS, which like Morgan Stanley has a big wealth management business and an equities-focused investment bank, has previously said that its wealth management division is the biggest client of the investment bank.
That means that there is a lot of logic to having the two units collaborating and swapping executives.