By Sonali Basak
(Bloomberg) -- Morgan Stanley Chief Executive Officer James Gorman shook up leadership of the firm’s massive wealth-management division, assigning one of its co-heads to focus on bank units offering loans and deposit accounts.
The move affects two executives who’ve been widely seen as contenders to replace Gorman in the years ahead: Shelley O’Connor, who co-led wealth management with Andy Saperstein, will run two regulated bank entities, which the company is looking to expand, the CEO wrote Tuesday in a memo to staff.
“Given the criticality of the banks to the future growth of our business, I have asked Shelley to dedicate her full-time efforts to leading them,” Gorman wrote. She helped create them, and “her extensive wealth-management experience and leadership make her uniquely suited for this important role.”
Shelley O'Connor
The shakeup follows last month’s announcement that President Colm Kelleher, once viewed as a possible successor to Gorman, will leave at the end of June. The departure of the 61-year-old company veteran opened up the competition among the senior ranks to someday ascend to the top of company. Other contenders include Ted Pick, who last year rose to head the investment-banking and trading division, bolstering his position as a potential CEO candidate. Pick, O’Connor and Saperstein are all in their 50s.
The company created Morgan Stanley Private Bank after the financial crisis to increase deposits and lend more to customers. Together, that unit and the other -- called Morgan Stanley Bank -- offer a range of services, such as facilitating payments and providing home loans and other credit lines. Clients include corporations, institutional investors and wealthy consumers.
Rooney’s Role
O’Connor has spent more than three decades at Morgan Stanley and is one of only three women on its 17-member operating committee.
Gorman recruited Saperstein from Merrill Lynch in 2006. As sole head of wealth management, he will “focus specifically on digital capabilities, enhancing client and adviser experiences, finding areas of growth and partnering with institutional securities and investment management,” Gorman wrote.
The memo also announced Rob Rooney will oversee a broader collection of teams that are supposed to keep the bank’s systems safe and running, naming him head of technology, operations and firm resiliency.
“Aggregating these functions under a single leader will enable increased efficiency and accountability,” Gorman said, pointing to a variety of risks associated with cybersecurity, data management and dealings with vendors. Phil Davies, the firm’s head of operations, will gain responsibility for business continuity and report to Rooney, according to the memo.
The Wall Street Journal reported the memo earlier Tuesday.
