Editor-in-Chief David Geracioti spoke with Krawcheck about a recently announced reorganization in the wealth-management division.
Registered Rep.: For aadvisor, you guys have had a pretty good year in 2007. Smith Barney revenue jumped by nearly 30 percent, net income by more; client assets by a similar amount. So you guys are doing great. Why reorganize?
Sallie Krawcheck: The old theory is, if it isn't broke, don't fix it, which I think is wrong. I think we need to continue to push the business forward, both through terrific times and challenging times. The financial advisors and bankers who are in the same market today report up completely separate lines that only meet at me, and so the opportunities for working together happens more by accident, or because a head of a bank office and a Smith Barney office know each other, get together and make it happen. But there's no real drive for that. By combining the management of the client-facing organizations under Charlie Johnston, we will be able to have more of an opportunity to do that.
RR: Then this won't affect brokers?
SK: No, no, no, no, no. Not at all. In fact, when we talk about the client segments, it is exactly that: client segments, not financial advisor or banker segments. What we're doing in New York is, today, I have a lot of the functions report to me: HR, PR,, etc., etc. etc. Those functions are going to report to a chief administrative officer, and instead, my direct reports are going to be made up by Charlie Johnston, who has responsibility for the client-facing organization, as well as people whose jobs it is to focus wholly and completely on each individual client base: ultra high-net-worth, high-net-worth, emerging affluent and institutional, all of which are large businesses for us. They will have responsibility for strategy, and for producing those products and services that are appropriate for those client bases.
RR: I understand that some of this is also about getting the advisors into banks?
SK: We have Smith Barney advisors today who sit in some of the Citibank branches, and that really doesn't have anything to do with this. That will continue to happen. So it isn't about any of the bad stuff, anything the recruiters are calling up our financial advisors and saying right now. It's only about doing more and doing better for our financial advisors. Another thing we're doing is really beginning to focus on the ultra-high-net-worth platform. Is there anything we can be bringing to that client base that we don't now, maybe because it falls between the cracks?
For the full interview with Sallie Krawcheck on video, check out our new feature, http://registeredrep.com/video..TV, at