Remember when the institutional side of the financial houses used to look down on retail registered reps? They may still, but, gosh, how times have changed.
Here is this from today’s New York Times story on James Gorman, late of and now CEO of Morgan Stanley
“After the trading losses in 2007, Mr. Gorman became co-president. The firm also put him in charge of thinking about long-term strategy with its chief financial officer. During the crisis, Mr. Gorman argued forcefully for a big strategic shift, with an emphasis on cutting complex products and expanding retail brokerage services.
“To that end, Mr. Gorman pushed Morgan Stanley to pay $2.75 billion last year to acquire a 51 percent stake in Smith Barney, the big brokerage firm owned by, another struggling financial behemoth. Morgan Stanley hopes to take full control of Smith Barney by 2014. The takeover gives it about 18,000 financial advisers and one of the biggest wealth management businesses in the world.
“According to Howard Chen, an analyst at Credit Suisse, history may decide that Morgan Stanley bought Smith Barney “for a song.” The deal was certainly transformative. The retail business now makes up 35 percent of Morgan Stanley’s total revenue (compared with 57 percent for its traditional institutional business), up from about a quarter share before the deal.”
Oh, and, as for blaming John Mack for Morgan's bad bets on real estate and mortgage-backed securities (the story hints, well, wonders, if Mack might have led the investment bank into some risky waters --- a totally reasonable question): That's why Philip Purcell was pushed out --- shareholders and staff demanded that Morgan Stanley get in on the mortgage-backed securities game to make more money. Shareholders and employees thought Purcell a fuddy-duddy, who just didn't get it. That's why he was pushed out, so Mack could come in and bring MS into the world of playing with fancy derivatives. At least that's how I remember it.