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Bye bye Mack


John Mack is making way for a changing of the guard at Morgan Stanley.

The Wall Street firm says Mack is stepping aside as CEO at year’s end to make way for James Gorman, long seen by many on Wall Street as Mack’s heir apparent.

Mack will remain as chairman.

The move is not surprising. The past year, of course, has been a grueling one for Mack and Morgan Stanley. But his energy level has been running on low and it’s clearly time for a new direction at the firm.

Moving-up Gorman, currently Morgan Stanley’s co-president, to CEO makes sense given the firm’s renewed commitment to more traditional lines of investment banking–including retail brokerage. In the wake of the financial crisis, Morgan Stanley has decided to take less risk in trading than some of its peers–most notably Goldman Sachs.

Morgan Stanley has rebounded from the crisis more slowly than Goldman and JPMorgan Chase because of its decision not to get back heavily into proprietary trading. Analysts have been critical of Mack’s decision to play it safe and it remains to be seen whether the 51-year-old Gorman will reverse that trend to better compete with Goldman.