Investment bank Morgan Stanley has fired 1,000 underperforming brokers from its retail brokerage unit, but the investment bank maintains that it is keeping this business.
Chief Executive John Mack said in a statement that unit was a great asset but should up its focus to wealthier clients.
“Improving productivity and profitability is a priority,” said Mack. “We’re also investing in developing top-quality financial advisers serving high-net worth clients.”
The retail brokerage unit, called the Individual Investor Group, has long lagged its peers. Merrill Lynch research shows Morgan Stanley’s retail brokerage had profit margins of 12% in the first half of 2005, compared with 21 percent at Citigroup’s Smith Barney and 19 percent at Merrill Lynch & Co. Inc.