Unstructured Finance

At the Goldman Sachs investor conference on Tuesday, Morgan Stanley wealth management executive Greg Fleming ran through his 31 slides like a financially savvy drill sergeant, with a full discussion of margins, lending, technology, "value propositions" and "illustrative solutions."

But in the Q&A session, he was asked an unusually thoughtful question by an audience member: What about the brand, and the culture, of Morgan Stanley Wealth Management?

As Morgan Stanley has taken control and increased ownership of the Smith Barney retail brokerage from Citigroup, legacy Smith Barney brokers have often complained about what's happening to the culture. Morgan Stanley is all about numbers and metrics, they say, expecting brokers and managers to constantly do more with less.

Morgan Stanley has fired hundreds of underperforming brokers who, under previous standards, were performing just fine. It also got rid of duplicative managers and lots of back office and administrative staff, as Fleming sought to chop $300 million off its annual expense bill. Adviser headcount is down 7 percent over the past three years, while other staff has been cut by 15 percent.

A new technology system that rolled out this year also has a feature to track broker activity, including the data and research they use, so that Morgan Stanley can monitor productivity and cut subscriptions for services that aren't in high demand.

By Matthew Goldstein

All too much of what we do in financial journalism is rush around to get the “scoop” on some big announcement by some corporate chieftain. Things like, the announcement of a new product, a management reshuffling or a bunch of firings. All important stuff and all stuff that could impact earnings and stock movements. But sometimes the big picture of what really is working for a company or is ailing it, gets lost in the scoop chase.

So that’s why we took a step back to look at some potentially radical solutions for fixing Bank of America, which right now has come to represent much of what remains broken with the U.S. housing market.

The point of the story was to look at ideas that bank CEO Brian Moynihan might be reluctant to do. Ideas that would drive shareholders and bondholders batty. But the kind of ideas that ultimately may be necessary to not only fix the bank, but also repair the nation’s sick housing market and equally sick economy.