Morgan Stanley is requiring that an increasing number of its branch office managers begin producing. The move is an outgrowth of its office "complexing" strategy, which groups together multiple branches under a single manager.
A Morgan Stanley spokesman says the move is part of an effort to "help our productive financial advisors double their business in five years. Our new structure will help ensure our resources are targeted to get us there."
But many of the producing managers, noting that the move reduces the company’s salary and administrative expenses, view the branch reorganizations as passive-aggressive cost-cutting measures.
"Essentially they’re demoting a third of the managers into a bunch of satellite managers," says one producing manager. "They’re taking full-time managers and making them producing managers, but they’re not going to reduce the workload."
The Morgan Stanley spokesman confirms that the firm has been complexing its branches over the last couple of months, but he says the effort was undertaken to "better manage resources."
Sources at the firm say senior, more experienced branch managers tend to head up complexes. Some of the benefits of grouping branches together include more coordinated staffing, recruiting and marketing efforts within a region.
In recent months, the firm has created about 35 complexes around the country, including a seven-branch grouping in Baltimore.
"Complexing is getting a little more common," says one branch manager. He adds that the need for complexes is growing as regional directors find it harder to find time to visit individual branches.
Even before the complexing began, some Morgan Stanley branch managers were also producing. But the complexing ratchets up the pace with which managers are converting—and Morgan Stanley’s high profile means the move could touch off similar moves at other firms.
As of the end of November, Morgan Stanley had just over 600 offices nationwide. Globally, the firm oversees $517 billion in client assets and has 12,500 financial advisors.