James Gorman remaking Morgan Stanley
For all those who thought that James Gorman would always exist in the large shadow of his predecessor, John Mack, recent events have proven them dead wrong.
Gorman seems bent on stamping the bank with his own print, remaking it for the future. At this point, it's unclear exactly what his vision is. It seems to be eschewing the Goldman Sachs' trader-oriented model and swerving more toward a Credit Suisse-like model, only less extreme. The bank's 1,600 jobs cuts, on top of the 4,000 job cuts last year, have certainly drawn attention.
Wealth Briefing notes that client-facing employees in wealth management have been spared any cuts, though some back office employees may be swept out. Is that a telling sign of where the bank wants to go?
As of late, it has been whittling away at the institutional business and building up in wealth management, as evidence by its purchase of all of Morgan Stanley Smith Barney. You cannot blame Gorman for wanting to diversify the bank. Change is always necessary. At the same time, he will be second-guessed no matter what. If trading results fall short of Goldman Sachs, critics will emerge. If wealth management results suffer some hiccups, another set of critics will emerge.
What the bank needs to do is firmly articulate a roadmap with projected milestones and targets so the world is clear on what the Morgan Stanley of the future will look like. That conversation may get started with the fourth quarter earnings report.
- here's the Wealth Briefing article