Morgan Stanley May Shed "Smith Barney" Name

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Morgan Stanley May Shed 'Smith Barney' Name

Article published on March 8, 2011

Morgan Stanley is considering dropping the name “Smith Barney” from the marquee of its giant retail brokerage, people familiar with the matter tell Dow Jones Newswires.

Morgan Stanley Smith Barney recently asked clients to choose from six potential new names for the wirehouse. None of them include “Smith Barney,” the name of the legacy brokerage that became part of Morgan Stanley’s wealth management unit in June 2009 when Citigroup sold its rival a majority stake.

The possible new names include Morgan Stanley Advisors, Morgan Stanley Private Wealth Advisors, Morgan Stanley Global Wealth Advisors, Morgan Stanley Wealth Advisors, Morgan Stanley Wealth Management and Morgan Stanley Global Wealth Management. The “global wealth management” version was the name of the unit prior to the joint venture with Smith Barney.

A Morgan Stanley spokesman declines to comment on a potential name change but says the firm regularly surveys clients about its brand. He tells Dow Jones he “wouldn't read a whole lot into this.”

A spokeswoman for Citigroup declines to comment.

However, many of the joint venture’s financial advisors, as well as outsiders, are said to have expected an eventual rebranding of the brokerage, Dow Jones reports. They say a change would highlight Morgan Stanley’s anticipated move to full ownership of the wealth management business in about three years.

Morgan Stanley bought a controlling stake of 51% in the joint venture in 2009, leaving Citigroup with 49%, in a sale forced by the 2008 financial crisis. In May of 2012, Morgan Stanley retains the option of buying another 14% of the joint venture, to be followed by 15% in 2013 and 20% in 2014.

Morgan Stanley CEO James Gorman said in November that the bank planned to act on its option to purchase the outstanding stake in Smith Barney, Dow Jones repots.

Aite Group research director Alois Pirker says it isn’t unusual for a brokerage to move to simplify its name following a merger or other change in control. However, he doesn’t believe “a year or two” is sufficient to “wipe away that memory.”

Pirker tells Dow Jones that he doesn’t expect a name change alone will cause legacy Smith Barney advisors to head for the exits. But it could stir a “psychological issue” for some, who may see it as the “tip of the iceberg” for more change if they were already thinking about moving to a competitor, Pirker said.

Indeed, a Morgan Stanley Smith Barney advisor working in the southeastern U.S. tells Dow Jones that a number of his Smith Barney legacy colleagues could consider a rebranding of the joint venture as the final blow to their former firm, wiping out hope that its legacy might continue.

By Kathleen Laverty

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