In his first step as head of retail brokerage at Morgan Stanley, James Gorman has streamlined the firm’s regional office structure -- reducing regional offices to four from eight and cutting out one layer of management. To head up the new regional offices, he brought on two former colleagues from Merrill Lynch and selected two others from inside Morgan Stanley.
Previously, there were eight regions with two layers of management between Mr. Gorman and the regional management, the firm said. Now, there will be four regions and no layers between the regional management and Mr. Gorman. The move puts about 14 regional directors and managers out of a job. At Merrill Lynch, Gorman took similar steps to streamline management structure, reducing the number of regional branches to four from twenty-seven over several years.
One well-known recruiter expressed outright enthusiasm about the two Merrill managers: Jerry Miller and Richard Skae. Miller, who has held a number of management positions at Merrill’s private client group and was most recently chief operating officer for an asset management business at Merrill Lynch, will be the new Mid-West Regional Director. Richard Skae, formerly regional director of New York City at Merrill Lynch, will be the new North-East Regional Director for Morgan Stanley.
“Miller is a great judge of talent, and he knows how to influence brokers and managers into joining the firm. He is highly thought of in terms of being very bright, and he’s certainly the type of guy that Gorman can rely upon to be a part of his braintrust,” says the recruiter. “Skae is a fabulous builder, arguably one of the best builders of businesses in the United States today. So he’s a real coup,” he says.
But another industry insider said Miller is not a great supervisor and had a lot of brokers misbehave on his watch at Merrill Lynch.
The recruiter was less enthusiastic about the two Morgan Stanley directors, Margaret Black and Bill McMahon, saying they are unpopular and just mediocre, respectively. Black, the Southern California Regional Director at Morgan Stanley, will become the Regional Director of the Western Region. McMahon, the New York Regional Director at Morgan Stanley, will become the Regional Director of the South-East Region, according to the firm.
Gorman, already president and chief operating officer of the retail brokerage, or Global Wealth Management Group, will now serve as head of national sales. In this new role, he’ll have oversight of the firm’s financial advisors, effectively immediately, Morgan Stanley said.
According to one top broker at the firm, the sales force is expecting “dramatic” changes from Gorman, but the reorganization still came as something of a surprise. “A lot of people are saying that it’s a good thing,” the broker says. “We expected him to bring in Merrill people. But we were pretty surprised when we got the email today. There are a lot of managers sitting on pins and needles wondering if they’re going to have a job. It will probably all unfold in the next thirty days.”