Morgan Stanley Wealth Management is an American
multinational financial services
Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...
corporation specializing in
retail brokerage
A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be confu ...
. It is the wealth & asset management division of
Morgan Stanley
Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
.
On January 13, 2009, Morgan Stanley and
Citigroup
Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking ...
announced that Citigroup would sell 51% of Smith Barney to Morgan Stanley, creating Morgan Stanley Smith Barney, which was formerly a division of Citi Global Wealth Management. The combined brokerage house has 17,646 financial advisors and manages $2 trillion in client assets.
Clients range from individual investors to small- and mid-sized businesses, as well as large corporations, non-profit organizations and family foundations.
On September 25, 2012, Morgan Stanley announced that its
U.S.
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...
wealth management business was renamed "Morgan Stanley Wealth Management". The broker-dealer designation for Morgan Stanley Wealth Management will remain "Morgan Stanley Smith Barney LLC".
History
![SmithBarney](https://upload.wikimedia.org/wikipedia/commons/7/7a/SmithBarney.gif)
Smith Barney & Co. was formed in 1938 through the merger of
Charles D. Barney & Co. and
Edward B. Smith & Co. Charles D. Barney & Co., a
New York
New York most commonly refers to:
* New York City, the most populous city in the United States, located in the state of New York
* New York (state), a state in the northeastern United States
New York may also refer to:
Film and television
* '' ...
and
Philadelphia
Philadelphia, often called Philly, is the largest city in the Commonwealth of Pennsylvania, the sixth-largest city in the U.S., the second-largest city in both the Northeast megalopolis and Mid-Atlantic regions after New York City. Sinc ...
based firm, was founded by
Charles D. Barney in 1873 following the failure of its predecessor
Jay Cooke & Company
Jay Cooke & Company was a U.S. bank that operated from 1861 to 1873. Headquartered in Philadelphia, Pennsylvania, with branches in New York City and Washington, D.C., the bank helped underwrite the Union Civil War effort. It was the first "wire ...
. Edward B. Smith & Co., founded in 1892 became a significant player in securities underwriting in 1934 when the firm absorbed the professionals from the securities business of
Guaranty Trust Company, following the passage of the
Glass Steagall Act
Glass is a non-crystalline, often transparent, amorphous solid that has widespread practical, technological, and decorative use in, for example, window panes, tableware, and optics. Glass is most often formed by rapid cooling (quenching) of ...
.
In 1975, Smith Barney merged with Harris, Upham & Co. to form Smith Barney, Harris Upham & Co., which, in 1977, was placed under SBHU Holdings, a
holding company
A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...
. In 1982, SBHU Holdings was renamed Smith Barney Inc. During the 1980s, the company was known for its television commercials featuring actor
John Houseman
John Houseman (born Jacques Haussmann; September 22, 1902 – October 31, 1988) was a Romanian-born British-American actor and producer of theatre, film, and television. He became known for his highly publicized collaboration with director ...
, with the
catchphrase
A catchphrase (alternatively spelled catch phrase) is a phrase or expression recognized by its repeated utterance. Such phrases often originate in popular culture and in the arts, and typically spread through word of mouth and a variety of mass ...
, "They make money the old-fashioned way. They ''earn'' it." After Houseman stepped down, the campaign continued with various actors, such as
Leo McKern
Reginald "Leo" McKern, Order of Australia, AO (16 March 1920 – 23 July 2002) was an Australian actor who appeared in numerous British, Australian and American television programmes and films, and in more than 200 stage roles. His notabl ...
,
Joel Higgins
Joel Franklin Higgins (born September 28, 1943) is an American actor and singer with a stage career spanning over 40 years.
Life and career
A graduate of Michigan State University where he was a member of Delta Tau Delta International Fraternit ...
and
George C. Scott
George Campbell Scott (October 18, 1927 – September 22, 1999) was an American actor, director, and producer who had a celebrated career on both stage and screen. With a gruff demeanor and commanding presence, Scott became known for his port ...
.
In the late 1980s, the retail brokerage firm Smith Barney was owned by
Sanford I. Weill
Sanford I. "Sandy" Weill (; born March 16, 1933) is an American banker, financier and philanthropist. He is a former chief executive and chairman of Citigroup. He served in those positions from 1998 until October 1, 2003, and April 18, 2006, re ...
's
Primerica Corporation. Commercial Credit purchased Primerica in 1988, for $1.5 billion ($ today). In 1992, they paid $722 million ($ today) to buy a 27% share of Travelers Insurance and in 1993 acquired
Shearson
Shearson was the name of a series of investment banking and retail brokerage firms from 1902 until 1994, named for Edward Shearson[E.F. Hutton
EF Hutton was an American brokerage firm, stock brokerage firm founded in 1904 by Edward Francis Hutton and his brother, Franklyn Laws Hutton. Later, it was led by well known Wall Street trader Gerald M. Loeb. Under their leadership, EF Hutton b ...](_blank)
) from
American Express
American Express Company (Amex) is an American multinational corporation specialized in payment card services headquartered at 200 Vesey Street in the Battery Park City neighborhood of Lower Manhattan in New York City. The company was found ...
. By the end of 1993, the merged company was known as Travelers Group Inc. although the brokerage business continued to operate under the Smith Barney brand.
In 1993, Weill bought stockbroker Shearson back from American Express for $1 billion ($ today), and merged it into Smith Barney.
Weill offered
Joe Plumeri
Joseph J. Plumeri II (born July 7, 1943) is vice chairman of the First Data Board of Directors. He was the chairman and CEO of Willis Group Holdings (Willis), a New York Stock Exchange-listed insurance broker, until July 2013. The company has 1 ...
the presidency of Smith Barney, and he became the President of the merged company that year.
He only lasted a year, as he experienced conflicts with existing Smith Barney managers.
In September 1997, Travelers acquired Salomon Inc. (parent company of
Salomon Brothers Inc.), for over $9 billion ($ today) in stock, and merged it with its own investment arm to create Salomon Smith Barney. In April 1998 Travelers Group announced an agreement to undertake a $76 billion ($ today) merger between Travelers and Citicorp, creating
Citigroup
Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking ...
, which at the time of the merger was the largest single financial services company in the world.
At the time of the
September 11, 2001, attacks
The September 11 attacks, commonly known as 9/11, were four coordinated suicide terrorist attacks carried out by al-Qaeda against the United States on Tuesday, September 11, 2001. That morning, nineteen terrorists hijacked four commerc ...
, it was the largest tenant in
7 World Trade Center
7 World Trade Center (7 WTC, WTC-7, or Tower 7) refers to two buildings that have existed at the same location within the World Trade Center site in Lower Manhattan, New York City. The original structure, part of the original World Trade Cent ...
, occupying 1,202,900 sq ft (111,750 m
2) (64 percent of the building) which included floors 28–45.
Sale to Morgan Stanley
During the
major financial crisis beginning in late 2008, Citigroup suffered large losses in its retained
collateralized debt obligation
A collateralized debt obligation (CDO) is a type of structured asset-backed security (ABS). Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing mortgage-backed securities (MBS).Lepke ...
exposure (loans that Citi underwrote but was not able to sell), and had to be
rescued
"Rescued" is a song by American Rock music, rock band Foo Fighters. Released on April 19, 2023, it is the first single by the band since the death of longtime drummer, Taylor Hawkins, and the first from their eleventh studio album, ''But Here We Ar ...
by the
U.S. federal government. They decided to sell or close "non-core" businesses in order to raise money. On January 13, 2009,
Morgan Stanley
Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
and Citigroup announced the merger of Smith Barney with Morgan Stanley's
Global Wealth Management Group, with Morgan Stanley paying $2.7 billion cash upfront to Citigroup for a 51% stake in the joint venture. The joint venture operates as Morgan Stanley Smith Barney.
Morgan Stanley itself was in a financially cash-strapped position like Citigroup during that time, but they were helped by the $9 billion that
Mitsubishi UFJ Financial Group had paid in 2008 for a 21% stake in Morgan Stanley.
On June 1, 2009,
Morgan Stanley
Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
and
Citigroup
Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking ...
announced they closed early on the launch of their joint venture that combines Morgan Stanley's wealth management unit (including many former
Dean Witter
Dean Witter Reynolds was an American stock brokerage and securities firm catering to a variety of clients. Prior to the company's acquisition, it was among the largest firms in the securities industry with over 9,000 account executives (ranking t ...
assets) with Citi's Smith Barney brokerage division. The new venture, called Morgan Stanley Smith Barney, was supposed to launch during the third quarter. The combined entity generates about $14 billion in net revenue, has 18,500 financial advisors, 1,000 locations worldwide and serves about 6.8 million households.
Citigroup disclosed on September 17, 2009, they would sell their remaining shares in the group to partner Morgan Stanley.
Acquisition history
The following is an illustration of the company's major mergers and acquisitions and historical predecessors (this is not a comprehensive list):
["Salomon Smith Barney" from Gambee, Robert. ]
Wall Street
'. W. W. Norton & Company, 1999. p. 73
References
External links
Morgan Stanley Wealth Management websiteSmith Barney
{{Authority control
Investment management companies of the United States
Citigroup
Morgan Stanley
American corporate subsidiaries
Companies based in Manhattan
Multinational joint-venture companies
Investment companies based in New York City
Multinational companies based in New York City
Financial services companies established in 2009
2009 establishments in New York City
American companies established in 2009
2009 mergers and acquisitions