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More Morgan Stanley Wealth Managers Are Heeding Mother Merrill's Call

Nine and a half billion dollars. That's the total number of assets managed by Morgan Stanley Financial Advisors who have defected to Merrill Lynch during the month of October, according to Investment News.

Well-known West Coast advice pro Rebecca Rothstein is one of the latest to exit Morgan Stanley for Mother Merrill, as it was once known. Could that monicker be making a comeback?

Rothstein has been ranked second on Barron's list of America's top 100 female advisors for the past three years and like many Morgan Stanley defectors, had been with Smith Barney when the two firms merged.

“This is a major loss for Morgan Stanley," said recruiter Bill Willis. "She is one of the big names in brokerage in Los Angeles."

Dozens of Smith Barney legacy Morgan Stanley financial advisors have been threatening to leave the firm because of its new technology platform. During summer, the group had hired a lawyer to argue that they should be able to keep lucrative retention payments even if they quit.

Rothstein, who has been based in Beverly Hills is remaining in that wealthy community at Merrill Lynch's private banking and investments group. Moving with her is an 11-member team, which reportedly manages around $2.5 billion in assets.

“Merrill Lynch has recently been mapping an attack plan for capitalizing on turmoil at Morgan Stanley, where technology issues and reputational blows have hampered a push to expand is retail brokerage,” said The Wall Street Journal, which noted that other rivals have also been looking to poach MS wealth management pros.

If you were to ask [Morgan Stanley Wealth Management President] Greg Fleming for a list of five advisers he didn't want to lose, [Rothstein] would have been on it,” Danny Sarch, president of Leitner Sarch Consultants Ltd., told Investment News.

Morgan Stanley spokesman Jim Wiggins noted that just because the advisors have left, doesn't mean their clients have gone with them.

Case in point: Another Barrons ranked Los Angeles based financial advisor, Palmer Murray, left Morgan Stanley to join a Registered Independent Advisor (RIA), Lourd Capital Management. However, his “two partners and a substantial portion of his managed assets” will remain with Morgan Stanley, according to Wiggins.

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AUTHORJanet Aschkenasy Insider Comment

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