Morgan Stanley plans to fire half of its 1,000 trainees and pare down its broker-training program after deciding the program isn't producing enough successful financial advisors.
Media reports said James Gorman, head of Morgan Stanley's global wealth management group, described the trainees to be let go as those "not tracking toward long-term success in the business." However, he said the firm will not cut any full-fledged advisors and is "committed to the long-term growth of our sales force."
Morgan Stanley now plans to train 700 to 1,000 brokers a year, down from its previous annual rate of 1,500 to 2,500, according to Reuters. Writing of the 7,000 advisors trained over the last four years, Gorman said, "While some of these individuals have been successful, many have not, and in fact are struggling to establish viable wealth management practices."
According to the New York Post, Morgan's retail group last year generated revenue of $490,000 per broker, far behind the $766,000 per-broker of Merrill Lynch and $556,000 per-broker of Citigroup.
Last year, Morgan Stanley fired about 1,000 underperforming brokers, or the bottom 10 percent. In March, it cut 25 broker managers. More recently, Gorman has shaken up management ranks and tried to emphasize his focus on attracting more high net worth clients.