As Morgan Stanley's earnings continue to plummet, the firm's brokers are doing all they can to weather the market's storm mainly by maintaining their existing client base.
"That's what I'm doing," says a Morgan Stanley West Coast-based producer. "All a broker can really do in these times is spend time servicing his clients, making sure they don't panic. That approach will produce more sales and more revenue in good market times. In bad market times, there will obviously be [fewer] sales and less revenue, but you can prevent a further drop in revenue by servicing your clients, taking care of their needs. The key is not panicking and weathering the storm."
This morning, Morgan Stanley announced that fourth-quarter earnings plunged 28%. The firm attributes the losses to fewer mergers and stock sales cut fees. The Sept. 11 terrorist attacks on the World Trade Center also figured in the losses. About 3,500 Morgan Stanley employees were forced to leave their WTC offices, and six died.
Since there are fewer revenues being produced from brokers' existing clients, "You also have to try and find more revenue, more clients and more investors by prospecting," says a Morgan Stanley producer in the South. "You simply have to produce more goods and services to maintain the level of revenue you need and want."
A Morgan Stanley rep on the East Coast says he spends his days "pampering" clients. "That's the most important thing you can do in these times," he says. "You have to take care of what you have now. You also have to continue to prospect to create new sources of revenue."
The broker tells clients "to remain in good quality stocks and bonds and make sure they don't panic because the market is gyrating," he says. "You don't sell Safeway, Southwestern Bell and the Dell's of the world even though they're not having the best year but because they're quality companies and they will continue to prosper in the future. [In today's market environment], you try and find more people who want to take that tack. That's what you're looking for in tough times."
Morgan Stanley Chief Financial Officer Stephen Crawford said in Wednesday morning's conference call that the firm feels "the trends have bottomed and we're probably going to move up from here. It feels like there's more stability and health in the market than there was three months ago.''
The Southern-based Morgan Stanley rep says, "The thing you have to do right now is be in touch with your clients; don't let them hang. Communicate with them. Service them. Keep their spirits up because this market will turn around."