Morgan Stanley brokerage steadies after stormy year

* Net new assets $5.8 bln after year of outflows

* Broker headcount flat at 18,140

By Helen Kearney

NEW YORK, April 21 (BestGrowthStock) – Morgan Stanley Smith Barney
said its assets and advisers increased in the first quarter,
stemming a flood of withdrawals and departures since the
brokerage joint venture was formed last June.

Investment bank Morgan Stanley (MS.N: ) (Read more about the money market today. ), which combined its
wealth management unit with Citigroup Inc’s (C.N: ) Smith Barney,
said on Wednesday that the venture took in $5.8 billion of net
new money. By contrast, Morgan Stanley Smith Barney saw $4.7
billion of net withdrawals in the fourth quarter.

Financial adviser headcount also stabilized at 18,140, up
by five people from the fourth quarter. Morgan Stanley, like
all of its big-bank rivals, had seen brokers leaving in droves
amid a frenzy of recruiting last year.

Morgan Stanley for the past year blamed the declines on
departing Smith Barney brokers who, unsettled by the merger,
fled to rivals or independent firms and took clients with them.
Executives contend that trend has played out.

“There’s always angst that occurs in a combination, but
when people see the the power of the platform, given our scale,
it settles down,” Morgan Stanley Chief Financial Officer Ruth
Porat told Reuters.

Morgan Stanley said its brokerage and wealth management
businesses generated revenues of $3.1 billion for the quarter,
flat with the fourth quarter. Pretax profit was up 20 percent
at $278 million.

The firm also shut down 25 branches during the quarter,
leaving 870 at the end of March.

One sore point: Average revenue per adviser fell slightly
to $685,000, which is still well below market leader Merrill
Lynch. On Friday, the Bank of America (BAC.N: ) unit reported
average revenue of $807,000 for the first quarter.

Stock Report

(Reporting by Helen Kearney; Editing by Lisa Von Ahn)

Morgan Stanley brokerage steadies after stormy year