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Morgan Stanley Wealth Management

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Morgan Stanley Wealth Management
Company typePrivate
IndustryFinancial services
Founded2009; 15 years ago (2009)
FounderHenry S. Morgan, Harold Stanley, Charles D. Barney, Edward B. Smith
Area served
Key people
James P. Gorman (chairman)
ProductsRetail brokerage, asset management, investment banking
RevenueUS$17,242 billion (2018)
US$4,521 billion (2018)
US$3,472 billion (2018)
AUMUS$2.05 trillion (2014)
Number of employees
17,646 (2011)
ParentMorgan Stanley

Morgan Stanley Wealth Management is an American multinational financial services corporation specializing in retail brokerage. It is the wealth & asset management division of Morgan Stanley. On January 13, 2009, Morgan Stanley and Citigroup announced that Citigroup would sell 51% of Smith Barney to Morgan Stanley, creating Morgan Stanley Smith Barney, which was formerly a division of Citi Global Wealth Management. The combined brokerage house has 17,646 financial advisors and manages $2 trillion in client assets.[1] Clients range from individual investors to small- and mid-sized businesses, as well as large corporations, non-profit organizations and family foundations.

On September 25, 2012, Morgan Stanley announced that its U.S. wealth management business was renamed "Morgan Stanley Wealth Management". The broker-dealer designation for Morgan Stanley Wealth Management will remain "Morgan Stanley Smith Barney LLC".[2]


Smith Barney & Co. logo

Smith Barney & Co. was formed in 1938 through the merger of Charles D. Barney & Co. and Edward B. Smith & Co. Charles D. Barney & Co., a New York and Philadelphia based firm, was founded by Charles D. Barney in 1873 following the failure of its predecessor Jay Cooke & Company. Edward B. Smith & Co., founded in 1892 became a significant player in securities underwriting in 1934 when the firm absorbed the professionals from the securities business of Guaranty Trust Company, following the passage of the Glass Steagall Act.[3]

In 1975, Smith Barney merged with Harris, Upham & Co. to form Smith Barney, Harris Upham & Co., which, in 1977, was placed under SBHU Holdings, a holding company. In 1982, SBHU Holdings was renamed Smith Barney Inc.[4] During the 1980s, the company was known for its television commercials featuring actor John Houseman, with the catchphrase, "They make money the old-fashioned way. They earn it."[5] After Houseman stepped down, the campaign continued with various actors, such as Leo McKern, Joel Higgins and George C. Scott.

Smith Barney Shearson logo following the purchase of the brokerage business of Shearson Lehman Hutton from American Express

In the late 1980s, the retail brokerage firm Smith Barney was owned by Sanford I. Weill's Primerica Corporation. Commercial Credit purchased Primerica in 1988, for $1.5 billion ($3,864,378,165 today). In 1992, they paid $722 million ($1,567,614,892 today) to buy a 27% share of Travelers Insurance and in 1993 acquired Shearson (which included the legacy business of E.F. Hutton) from American Express. By the end of 1993, the merged company was known as Travelers Group Inc.[citation needed] although the brokerage business continued to operate under the Smith Barney brand.

In 1993, Weill bought stockbroker Shearson back from American Express for $1 billion ($2,109,191,431 today), and merged it into Smith Barney.[6][7] (Weill had been in charge of Shearson Loeb Rhoades and sold it to American Express in 1981.[8]) Weill offered Joe Plumeri the presidency of Smith Barney, and he became the President of the merged company that year.[6][9][10] He only lasted a year, as he experienced conflicts with existing Smith Barney managers.[6]

In September 1997, Travelers acquired Salomon Inc. (parent company of Salomon Brothers Inc.), for over $9 billion ($17,082,089,552 today) in stock, and merged it with its own investment arm to create Salomon Smith Barney.[11] In April 1998 Travelers Group announced an agreement to undertake a $76 billion ($142,069,416,088 today) merger between Travelers and Citicorp, creating Citigroup, which at the time of the merger was the largest single financial services company in the world.

At the time of the September 11, 2001, attacks, it was the largest tenant in 7 World Trade Center, occupying 1,202,900 sq ft (111,750 m2) (64 percent of the building) which included floors 28–45.[12][13]

Sale to Morgan Stanley[edit]

During the major financial crisis beginning in late 2008, Citigroup suffered large losses in its retained collateralized debt obligation exposure (loans that Citi underwrote but was not able to sell), and had to be rescued by the U.S. federal government. They decided to sell or close "non-core" businesses in order to raise money. On January 13, 2009, Morgan Stanley and Citigroup announced the merger of Smith Barney with Morgan Stanley's Global Wealth Management Group, with Morgan Stanley paying $2.7 billion cash upfront to Citigroup for a 51% stake in the joint venture. The joint venture operates as Morgan Stanley Smith Barney.[14] Morgan Stanley itself was in a financially cash-strapped position like Citigroup during that time, but they were helped by the $9 billion that Mitsubishi UFJ Financial Group had paid in 2008 for a 21% stake in Morgan Stanley.[15][16][17]

On June 1, 2009, Morgan Stanley and Citigroup announced they closed early on the launch of their joint venture that combines Morgan Stanley's wealth management unit (including many former Dean Witter assets) with Citi's Smith Barney brokerage division. The new venture, called Morgan Stanley Smith Barney, was supposed to launch during the third quarter. The combined entity generates about $14 billion in net revenue, has 18,500 financial advisors, 1,000 locations worldwide and serves about 6.8 million households.[18]

Citigroup disclosed on September 17, 2009, they would sell their remaining shares in the group to partner Morgan Stanley.[19]

Acquisition history[edit]

The following is an illustration of the company's major mergers and acquisitions and historical predecessors (this is not a comprehensive list):[20]

Acquisition history
Morgan Stanley
Smith Barney

(merged 2009)
Morgan Stanley
(merged 1997, formerly Morgan Stanley Dean Witter)

Morgan Stanley
(est. 1935)

Dean Witter Reynolds
(merged 1978)

Dean Witter
(est. 1924)

Reynolds Securities
(est. 1931)

Smith Barney Shearson
(merged 1993)
Smith Barney, Harris Upham & Co.
(acq. 1985)

Primerica Corporation
(later acq. by Commercial Credit)

Smith Barney & Co.
(merged 1938)

Edward B. Smith & Co.
(est. 1892)

Charles D. Barney & Co.
(est. 1873)

Harris, Upham & Co.
(est. 1929, acq. 1975)

Shearson Lehman Hutton
(merged 1988)
Shearson Lehman Brothers
(merged 1984)
Shearson/American Express
(merged 1981)

American Express
(est. 1850)

Shearson Loeb Rhoades
(acquired 1981)
Shearson Hayden Stone
(merged 1973)
Hayden Stone, Inc. (formerly CBWL-Hayden Stone, merged 1970)

Cogan, Berlind, Weill & Levitt
(formerly Carter, Berlind, Potoma & Weill, est. 1960)

Hayden, Stone & Co.

Shearson, Hammill & Co.
(est. 1902)

Loeb, Rhoades, Hornblower & Co.
(merged 1978)
Loeb, Rhoades & Co.
(merged 1937)

Carl M. Loeb & Co.
(est. 1931)

Rhoades & Company
(est. 1905)

Hornblower, Weeks, Noyes & Trask
(merged 1953–1977)

Hornblower & Weeks
(est. 1888)

Hemphill, Noyes & Co.
(est. 1919, acq. 1963)

Spencer Trask & Co.
(est. 1866 as Trask & Brown)

Paul H. Davis & Co.
(est. 1920, acq. 1953)

Robinson Humphrey Co. (acq. 1982)

Foster & Marshall (acq. 1982)

Balcor Co. (acq. 1982)

Chiles, Heider & Co. (acq. 1983)

Davis, Skaggs & Co. (acq. 1983)

Columbia Group (acq. 1984)

Financo (founded 1971, acq. 1985)

L. Messel & Co. (acq. 1986)

Lehman Brothers Kuhn Loeb
(merged 1977)

Lehman Brothers
(est. 1850)

Kuhn, Loeb & Co.
(est. 1867)

Abraham & Co.
(est. 1938, acq. 1975)

E. F. Hutton & Co.
(est. 1904)


  1. ^ Kapner, Suzanne; Lucchetti, Aaron (February 22, 2012). "Citigroup Faces Smith Barney up from 546$Billion in november 2007 Hit". The Wall Street Journal. Retrieved May 20, 2012.
  2. ^ "Morgan Stanley Smith Barney is Now Morgan Stanley Wealth Management" (Press release). Morgan Stanley. Sep 25, 2012. Retrieved October 16, 2012.
  3. ^ Business: Marriage of Convenience. TIME Magazine, December 20, 1937
  4. ^ Grant, Tina (ed.) (1996) International Directory of Company Histories (volume 14) St. James Press, Detroit, p. 464, ISBN 1-55862-218-7
  5. ^ Elliott, Stuart (August 25, 1995). "THE MEDIA BUSINESS: ADVERTISING; Smith Barney summons the ghost of a haughty John Houseman in a revival of its 'timeless' ads". The New York Times.
  6. ^ a b c Bianco, Anthony (March 30, 1998). "Joe Plumeri: The Apostle of Life Insurance". Business Week. Archived from the original on December 9, 2012. Retrieved July 15, 2010.
  7. ^ Rob Wells, "American Express Sells Shearson Unit to Primerica", The Dispatch, March 13, 1994, accessed July 16, 2010
  8. ^ "American Express to Buy Shearson as Takeovers Transform Wall St". The New York Times.
  9. ^ "Plumeri next Willis CEO; Former Citigroup executive to succeed Reeve". Business Insurance. October 2, 2000. Archived from the original on September 10, 2012. Retrieved July 15, 2010.
  10. ^ "Willis chief discusses changes in financial services. (Willis Group Ltd. CEO Joseph J. Plumeri)(Interview)". Business Insurance. January 15, 2001. Retrieved July 15, 2010.[dead link]
  11. ^ Ben Duronio (June 12, 2012). "Morgan Stanley Is Killing 'Smith Barney' — Here's The Story Of How It Died". Business Insider.
  12. ^ Gilsanz, Ramon; Edward M. DePaola; Christopher Marrion; Harold "Bud" Nelson (May 2002). "WTC7 (Chapter 5)". World Trade Center Building Performance Study (PDF). FEMA. Archived (PDF) from the original on March 5, 2008. Retrieved February 17, 2008.
  13. ^ "Building: 7 World Trade Center". CNN. 2001. Archived from the original on October 13, 2007. Retrieved September 12, 2007.
  14. ^ "Morgan Stanley and Citi to Form Industry-Leading Wealth Management Business Through Joint Venture" (PDF). Citigroup. January 13, 2009. Archived from the original (PDF) on 2009-02-06. Retrieved January 13, 2009.
  15. ^ "Morgan Stanley Completes Mitsubishi Deal". The New York Times. 29 September 2008. Retrieved 4 November 2020.
  16. ^ Ellis, David (22 September 2008). "Morgan Stanley to sell stake to Japan's MUFG". cnn. Retrieved 4 November 2020.
  17. ^ "Breakingviews - Morgan Stanley has paid off smartly for MUFG". reuters. 15 May 2018. Retrieved 4 November 2020.
  18. ^ BusinessWeek
  19. ^ Rieker, Matthias (September 17, 2009). "Citi Plans to Shed Stake in Smith Barney". The Wall Street Journal.
  20. ^ "Salomon Smith Barney" from Gambee, Robert. Wall Street. W. W. Norton & Company, 1999. p. 73

External links[edit]