Smith Barney losing nearly 80 reps a week
It’s shaping up to be another challenging quarter for Smith Barney as the firm continues to lose reps and advisers at a blistering pace.
It’s shaping up to be another challenging quarter for Smith Barney as the firm continues to lose reps and advisers at a blistering pace.
Over the first seven weeks of 2009, New York-based Smith Barney saw 539 brokers leave, according to a source outside the firm with knowledge of the departures. That translates into 77 brokers leaving each week from Jan. 1 to Feb. 19.
The recent exodus follows Smith Barney’s loss of 970 brokers in the fourth quarter in 2008. For the entire year, the firm saw its adviser head count drop 11% to 13,765 ( InvestmentNews, March 1, “Smith Barney bleeds as it prepares for merger”).
The departures include a range of financial pros, from trainees and rookies who were let go by the firm to veteran producers recently recruited by rivals, the source said.
Big winners include rivals such as Wachovia Securities LLC and UBS Financial Services Inc., who picked up 115 and 113 advisers, respectively.
Industry observers also stressed that many firms across the brokerage industry are showing the door to brokers who produce less than $500,000 in fees and commissions each year.
Alexander Samuelson, a Smith Barney spokesman, said the firm would not comment on its head count figures beyond those it releases at the end of each quarter.
Brokers left in the fourth quarter due to the demise of Smith Barney’s parent, Citigroup Inc. of New York, a recruiter based in the Southwest said. Now the advisers could be leaving because of displeasure with the firm’s preparations to be the junior partner to former rival Morgan Stanley of New York in the two firms’ impending joint venture.
In January, Citigroup said it would exchange Smith Barney for a 49% stake in a new firm, dubbed Morgan Stanley Smith Barney, and a $2.7 billion cash payment. Meanwhile, Smith Barney brokers have kept a few perks, according to a news report Monday. After canceling an annual trip designed to reward its top brokers, Citigroup paid out $3.5 million worth of gift cards, according to The New York Post. Last month, Citigroup gave the top 2,000 advisers at its Smith Barney brokerage unit debit cards worth $1,000, $2,000 or $3,000 depending on their performance, the Post reported.
Learn more about reprints and licensing for this article.
