Morgan Stanley Reorganizes Wealth Management Sales Structure—Memo

Morgan Stanley is reorganizing its wealth management division, trimming its regional sales structure to six regions from eight as of February 1, according to a memo sent late Tuesday to the firm’s nearly 16,000 advisors.

The investment banking giant, which derived 44% of its revenue and 35% of its profit from its wealth unit in the third quarter, is eliminating its Northwest and New England regions, according to the memo, which was signed by Eastern division head Rick Skae, Western division head Bill McMahon, and Private Wealth Management head Vince Lumia.

The shift is the first major restructuring since Shelley O’Connor and Andy Saperstein took the reins of the business that serves wealthy individuals, families and their businesses from Greg Fleming one year ago and occurs amid a broad cost-cutting campaign orchestrated by chairman and chief executive James Gorman.

The company took pains to assure its brokers that the changes will not directly affect their businesses, in contrast to a restructuring of the branch complex organization in April.

“While the number of regions is decreasing, we are maintaining overall regional staffing levels to ensure that we continue to provide a high level of support to managers and financial advisors throughout the branch system,” the memo said.

Rick Ryan, who runs the New England region, will leave the company “to pursue other opportunities” while Northwest region head Michael Struckman will move from San Francisco to take over a reorganized Southeast region, the memo said.  Ryan, who is based in Boston, has been with the company for his entire brokerage career, which began in 1986, according to the BrokerCheck database.

Timothy P. Byrnes, who has run the Southeast region since February, will assume a new role that the memo did not specify.

Morgan Stanley’s remaining regional managers will continue in their positions, organized under the firm’s existing Eastern and Western division structure. They are Ralph Balzano in the Northeast, Lisa Cregan in the Mid Atlantic; Steve Austin in the Great Lakes; Curt Peterson in the Pacific Coast; and Ron Thacker in the Central region.

Additional announcements about the management structure of branch complexes will be forthcoming, according to Tuesday’s memo.

Morgan Stanley Wealth, the biggest U.S. brokerage firm following its purchase of Smith Barney in 2009, undertook several rounds of management restructuring under Fleming and this year hit the 22% pretax profit margin target outlined by Gorman.

Morgan Stanley last truncated its sales management structure in April 2014, when it slimmed from 12 to eight regions and from four to two divisions. It has, however, been making small tweaks to consolidate branches and specific divisions, such as its consulting group and support personnel, as it seeks to pare back expenses.