Home Business Morgan Stanley Smith Barney Advisers Threaten To Leave The Company

Morgan Stanley Smith Barney Advisers Threaten To Leave The Company

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Brokerage Morgan Stanley Smith Barney (MSSB) is facing somewhat of a revolt from some of its advisers, who are fed up with glitches in the firm’s new technology platform, called “3D”, which enables them to manage client funds, store information, and refer research and market data.

Morgan Stanley Smith Barney Advisers Threaten To Leave The Company

According to a report in Reuters, a group of about 40-48 advisers have threatened to quit as the technological problems have made functioning very difficult, and have even hired a lawyer to help them retain retention payments in the event they quit. The problems relate to delays in trading, foreign currency transactions problems, and erroneous account statements.

Reuters cites sources who claim that one of the top advisers of the firm, Rebecca Rothstein, has apparently briefed Morgan Stanley (NYSE:MS) CEO James Gorman on behalf of the group, and advised him of their intention to resign.

According to Reuters, Gorman advised Rothstein that while the firm was aware of the issues and attending to them, the advisers would be better off discussing their complaints with Greg Fleming, head of the brokerage division.

On the other hand company spokesman, James Wiggins, acknowledged that there have been complaints with the new system, but claimed to be unaware of the particular group of advisers referred to above. He said, “No such letter has been sent to management, and no mass exodus has been threatened,” he said. “Management’s door is always open to discuss any concerns they may have.” Wiggins also clarified that “there is a very large number of financial advisers who are doing just fine.”

To be fair, some of the advisers admit that Morgan Stanley (NYSE:MS) is taking steps to address the issues, and has set up a program called “We Hear You”, where complaints may be routed.

The implications of a large scale exodus of advisers are serious – it would hurt financially and cause a loss of reputation. These advisers generate revenue for the firm on the assets they oversee. According to Reuters, four advisers in the group manage, in aggregate, about $47 billion, and the loss of these assets could be the gain for rivals such, as Bank of America Corp (NYSE:BAC) Merril Lynch and Wells Fargo (WFC).

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