Morgan Stanley Bankers Can't Call The Firm's Brokers Idiots Anymore

Well, technically they can, but it generally backfires after the brokers tell them to "check out the scoreboard-- this is my world now, sweet cheeks, and you're just livin' in it."

Culturally, one of the biggest challenges with the expansion into wealth management was getting Morgan Stanley’s bankers, traders and financial advisers to work together. Bankers are paid to structure mergers, and the executives they deal with often need financial advisers to manage their money. In theory, banking and retail brokerage businesses are supposed to complement each other, with one bringing the other business. But on Wall Street, it rarely works this way, because bankers tend to look down on brokers, whom they see as rather mundane. Mr. Fleming has been trying to change this attitude. It doesn’t hurt that wealth management, not banking, drives the company’s earnings these days. Wealth management now generates almost 45 percent of Morgan Stanley’s revenue, compared with 23 percent in 2007. “As a banker, you like wealth management a whole lot more when it is responsible for lifting the entire firm’s stock price at a place where people are paid largely in stock,” Mr. Mayo said. Mr. Fleming, a former banker, has moved senior bankers, some of whom he worked with at Merrill Lynch, into wealth management to work with the company’s brokers.

“I recently brought in a possible deal, and someone in banking actually returned my call,” said one Morgan Stanley broker, who spoke on the condition of anonymity because of a firm policy against speaking to the media. “It’s harder for the firm’s bankers to call us idiots when we are driving the firm’s earnings.”

Chief’s Vision for Morgan Stanley Is Showing Some Success [Dealbook]