Smith Barney vs. UBS vs. Merrill vs
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Morgan Stanley is a top tier investment bank. They are up with
the likes of Goldman, Lehman and Bear. Their stock has done a
good job of rising and their wealth management division just had their
best quarter since the first quarter of 2001. Gorman said they
are going to stabilize at around 8,000 brokers. The best thing is
that recently they have shown that they are willing to spend money to
make money. Technology changes, more deals (Highland Capital will
be listed Monday). The thing is that with anything, you either
leave at the very top or the very bottom. A lot of people left MS
at the bottom last year. It makes no sense for people to leave at
this point seeing the vast improvements MS is making. As for the
training, it sucks, they are going to completely overhaul it and I
truly believe they will start to bring in top talent. The one
thing that baffles me is the low number of ptople in MS GWM that went
to good schools. It seems as if the sky is the limit on the money
you can make, especially with a good name like MS behind you. Why
dont people from top tier schools get into the wealth management
business? Also, there is a revenue based bonus you can recieve at MS in
your first year.
[quote=Biasedrecruiter]Merrill, the largest brokerage house in the U.S., is a signatory to the interbrokerage pact that allows brokers to leave with client contact information so they can ask customers whether they wish to transfer accounts to the new firm. Brokers, however, must leave behind account details.
The protocol, designed to allow brokers to switch firms without fear of legal reprisal, requires firms to transfer account data within a day of receiving a one-page authorization from a brokers' client. Wachovia Corp. (WB) unit Wachovia Securities, Citigroup Inc. (C) unit Smith Barney and the UBS Wealth Management unit of UBS AG (UBS) have also signed the pact.[/quote]
Does this mean that MS is not part of the pact? And does this pact preclude the broker from taking his clients to an indy?
[quote=Diplomaticos] The one thing that baffles me is the low number of ptople in MS GWM that went to good schools. [/quote]
They tend to be in the Private Wealth Management division at MS.
RecruitingAce-
Can you comment on the following payout grid regarding SB (from
onwallstreet)?
Thanks,
Rugby
Rugby -
Yes I can. If you will notice, at the 600K and 1M level of production, the grid clearly shows that Smith Barney payouts are higher than Merrill, Morgan Stanley and UBS.
At the 200K and 400K level, Smith Barney is the lowest amongst the three.
HOWEVER, if you read the assumptions in the fine print, it clearly states that these payouts are based on someone who has been there for 7 years! In other words, if you have been at Smith Barney for 7 years and are only producing at a 200 - 400K level, then there is something clearly wrong with your production and because of that, Smith Barney does not reward lethargicism.
On the other hand, if you are between 600K to 1M in production after 7 years, then not only do they reward you well, but they reward you better than any other wirehouse in the industry!
I hope this helps.
[quote=Diplomaticos]
Morgan Stanley is a top tier investment bank. They are up with the likes of Goldman, Lehman and Bear.
[/quote]
No, Morgan Stanley WAS a top tier investment bank--then they bit off Dean Witter and all hell broke loose.
As for Lehman--do they still have that boiler room at 55 Water Street?
[quote=NASD Newbie]
[quote=Diplomaticos]
Morgan Stanley is a top tier investment bank. They are up with the likes of Goldman, Lehman and Bear.
[/quote]
No, Morgan Stanley WAS a top tier investment bank--then they bit off Dean Witter and all hell broke loose.
You might want to take a look at recent investment banking numbers before you speak again, Put. There are only two top-tier banking players these days, MS and GS.
[/quote]OK. So in year one through three (Training period) you still say that SB has the best payout grid versus other major wirehouses?
In year 2 at MS, u make 33% grid, get a 25% revenue bonus and on top of
that get your salary. so, if you do 100k in revenue in your
second year, you make 25k in bonus, 33k in commissions and lets say 30k
in salary. This is 88k, what other company does better than that?
Also, NASD Newbie, MS is still a top tier investment bank. Have
you heard of a company called google? who did that deal?
Chipotle…the hottest IPO since 2001, another MS deal. Plus,
check out the recent earnings, there are only 2 top investment banks
these days, MS and GS. Smith Barney is owned by a bank not a
securities firm, Citi is having tons of problems, it will be
interesting to see what Chucky P can do over there, otherwise, with all
the pressure from the Saudis, they are going to get broken up. I
bet no one on these boards ever was in the ball park to be interviewed
by GS.
[quote=Diplomaticos]In year 2 at MS, u make 33% grid, get a 25% revenue bonus and on top of
that get your salary. so, if you do 100k in revenue in your
second year, you make 25k in bonus, 33k in commissions and lets say 30k
in salary. This is 88k, what other company does better than that?
Also, NASD Newbie, MS is still a top tier investment bank. Have
you heard of a company called google? who did that deal?
Chipotle…the hottest IPO since 2001, another MS deal. Plus,
check out the recent earnings, there are only 2 top investment banks
these days, MS and GS. Smith Barney is owned by a bank not a
securities firm, Citi is having tons of problems, it will be
interesting to see what Chucky P can do over there, otherwise, with all
the pressure from the Saudis, they are going to get broken up. I
bet no one on these boards ever was in the ball park to be interviewed
by GS.
[/quote]
Who really CARES if they are a top tier investment banker or not? For most truly professional advisers, the IPO game is a complete waste of time…
[quote=joedabrkr]
For most truly professional advisers, the IPO game is a complete waste of time....
[/quote]
The ability to get some new issue allocation for your better accounts is a reason to work for a wirehouse.
You cannot expect independents--such as Joe--to acknowledge that reality because it's a game they'll never play. It's like a guy who never gets a date with a beautiful girl--he'll tell himself that beautiful girls are overrated.
Nobody gets as many shares of the hot stocks as they could sell--but it's nice to get some and your clients will appreciate it.
[quote=NASD Newbie]
[quote=joedabrkr]
For most truly professional advisers, the IPO game is a complete waste of time…
[/quote]
The ability to get some new issue allocation for your better accounts is a reason to work for a wirehouse.
You cannot expect independents--such as Joe--to acknowledge that reality because it's a game they'll never play. It's like a guy who never gets a date with a beautiful girl--he'll tell himself that beautiful girls are overrated.
Nobody gets as many shares of the hot stocks as they could sell--but it's nice to get some and your clients will appreciate it.
[/quote]There's a glaring flaw or two in your analysis Newbie....
For starters, remember that investment bankers are not the adviser's friend. Their job is to get shares of the client company sold for as high a valuation as possible. Not really a question that is open to debate...it's the duty they have to their client-the company going public.
Too, as you alluded, the deals you really want you almost never get enough shares. Yet, to get a sufficiently high "index"(or whatever variation they have at "your" firm) you must participate heavily many or all of the other deals with aren't as hot, or perhaps even SUCK. Consider, for example, new issues of closed end funds. How many of those are actually a good deal....in the best interests of the client? Most of them you could easily pick up for 10-15% less once the syndicate bid drops out in about 90-120 days. (Speaking only generically and hypothetically, of course. Not making ANY recommendations for action!)
Last but not least, consider that when you're partipating in the IB process as an advisor, providing "distribution", what you're essentially doing in the case of a true NEW IPO is helping clients purchase shares in companies that are unseasoned. Often these companies are managed by staff with little or no experience in running a publicy traded firm. Those who have had insight into this process know that running a public company versus private firm is another league entirely with another consituency(shareholders) to serve. Why mess around with that stuff when there are so many good quality companies out there with established track records as public firms?
Just one man's opinion....
Diplomaticos -
A good answer with good, supporting facts regarding Morgan Stanley in the second year. Now, here's the "rest of the story..."
You say that at Morgan Stanley in the second year that you would be making around 88K if you are producing 100K... 33% equals 33,000, plus 30K salary, plus a 25K bonus. Fine. Then you challenged the Board to provide a better compensation than that.. and so I will.
First of all, at Morgan Stanley, in your first year you only make your salary. No commissions. So let's assume that in year one a new producer generates 50K, and in year two, by your assumed numbers, he/she is at 100K.
At Morgan Stanley in year 1 you make 30K (according to your assumed salary). In year two, you make 88K.. for a grand total of 118K in 2 years. Not bad.
At SMITH BARNEY, in year one you make 30K salary (by your assumption, although Smith Barney pays a LOT more than that in salary), plus 33.25% payout = 16,600, plus 6K in cash bonuses, PLUS 10K in stock option bonus. TOTAL IN YEAR (not including stock options) is: 52,600.
In YEAR TWO, assuming 100K production, that's 33,250 in commissions (33.25%), plus 30K salary, plus another 6K in cash bonus, plus another 10K in stock options. TOTAL IN YEAR 2 (not including stock options): $69,250.
TOTAL in 2 years at Morgan Stanley: $118K
TOTAL at Smith Barney in 2 years: $121,250 (not including 20K more in stock options)
WINNER: Smith Barney
What stock do you want to own? MS or C?
http://finance.yahoo.com/q/bc?s=MS&t=2y&l=on&z=m &q=l&c=c
[quote=joedabrkr]
[quote=NASD Newbie]
[quote=joedabrkr]
For most truly professional advisers, the IPO game is a complete waste of time…
[/quote]
The ability to get some new issue allocation for your better accounts is a reason to work for a wirehouse.
You cannot expect independents--such as Joe--to acknowledge that reality because it's a game they'll never play. It's like a guy who never gets a date with a beautiful girl--he'll tell himself that beautiful girls are overrated.
Nobody gets as many shares of the hot stocks as they could sell--but it's nice to get some and your clients will appreciate it.
[/quote]There's a glaring flaw or two in your analysis Newbie....
For starters, remember that investment bankers are not the adviser's friend. Their job is to get shares of the client company sold for as high a valuation as possible. Not really a question that is open to debate...it's the duty they have to their client-the company going public.
Too, as you alluded, the deals you really want you almost never get enough shares. Yet, to get a sufficiently high "index"(or whatever variation they have at "your" firm) you must participate heavily many or all of the other deals with aren't as hot, or perhaps even SUCK. Consider, for example, new issues of closed end funds. How many of those are actually a good deal....in the best interests of the client? Most of them you could easily pick up for 10-15% less once the syndicate bid drops out in about 90-120 days. (Speaking only generically and hypothetically, of course. Not making ANY recommendations for action!)
Last but not least, consider that when you're partipating in the IB process as an advisor, providing "distribution", what you're essentially doing in the case of a true NEW IPO is helping clients purchase shares in companies that are unseasoned. Often these companies are managed by staff with little or no experience in running a publicy traded firm. Those who have had insight into this process know that running a public company versus private firm is another league entirely with another consituency(shareholders) to serve. Why mess around with that stuff when there are so many good quality companies out there with established track records as public firms?
Just one man's opinion....
[/quote]
Interesting how Newbie never responded to this one....maybe he didn't have a good rebuttal? Or too busy trading insults with Metellnoname?
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Artie, first year at MS you make a 20% revenue bonus. so you
would make 36k your first year. also, how long is the lock up
with the stock options? How about the fact that all the other banks are
making big money and Citi seems to be lagging? It seems as if
they are having problems now (not that MS hasnt had problems in the
past year). I truly believe MS is building a solid foundation to
become #1 in the business. I have seen no very big producers from
MS leaving lately, only smaller ones (under 500k). However, I
have seen numerous big advisors coming to MS recently.
Winner? Morgan Stanley!
Dip.... Gorman's got you drinking out of the MS goblet of kool-aid eh????? While I agree that MS has made great strides to firm up its position as a top tier firm, they still have a long way to go before the industry can consider them on par with SB and ML.... I have a good friend at MS in NY and even a top recruiter in my area (who calls me the first Monday of every month like clockwork at 930am) agree with that statement.
They are making sound moves... But Gorman (who was eased out of ML by the way) still has several more years or radical changes to go....
[quote=blarmston]... But Gorman (who was eased out of ML by the way)....[/quote]
Blarm, that's the first I've heard this...what's the rest of the story...why was he "eased out"?
Hey Diplo -
Only my rugby teamates call me Artie.. but I guess it's okay if you do the same.
As far as Morgan Stanley goes, I guess you have to be in my shoes to see the many resumes I receive every day and conclude that out of all the firms out there, it seems that I see the greatest percentage of people who are looking for a new position coming from Morgan Stanley.
Best...