Morgan Stanley Wealth Management is an American multinational

financial services Financial services are service (economics), economic services tied to finance provided by financial institutions. Financial services encompass a broad range of tertiary sector of the economy, service sector activities, especially as concerns finan ...

corporation specializing in retail brokerage. It is the wealth & asset management division of

Morgan Stanley Morgan Stanley is an American multinational investment bank and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in 42 countries and more than 80,000 employees, the firm's clients in ...

. 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 company based in New York City. The company was formed in 1998 by the merger of Citicorp, t ...

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 (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 states and a federal capital district, Washington, D.C. The 48 contiguous ...

wealth management business was renamed "Morgan Stanley Wealth Management". The

broker-dealer In financial services, a broker-dealer is a natural person, company or other organization that engages in the business of trading securities for its own account or on behalf of its customers. Broker-dealers are at the heart of the securities and ...

designation for Morgan Stanley Wealth Management will remain "Morgan Stanley Smith Barney LLC".

History

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 (state), a state in the northeastern United States * New York City, the most populous city in the United States, located in the state of New York New York may also refer to: Places United Kingdom * ...

and

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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 American Civil War, Union Civil War effort. It ...

. 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. 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 Security (finance), securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own Share ...

. 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 Romanians, Romanian-born British Americans, British-American theatre and film producer, actor, director, and teacher. He became known for his highly publ ...

, 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 (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 notable roles include Clang in ...

, Joel Higgins and George C. Scott. In the late 1980s, the retail brokerage firm Smith Barney was owned by Sanford I. Weill'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 (which included the legacy business of E.F. Hutton) from

American Express American Express Company or Amex is an American bank holding company and multinational financial services corporation that specializes in payment card industry, payment cards. It is headquartered at 200 Vesey Street, also known as American Expr ...

. 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 had been in charge of Shearson Loeb Rhoades and sold it to American Express in 1981.) Weill offered Joe Plumeri 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

, 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, also known as 9/11, were four coordinated Islamist terrorist suicide attacks by al-Qaeda against the United States in 2001. Hijackers in the September 11 attacks#Hijackers, Nineteen terrorists hijacked four com ...

, it was the largest tenant in

7 World Trade Center 7 World Trade Center (7 WTC, WTC-7, or Tower 7) is an office building constructed as part of the new World Trade Center (2001–present), World Trade Center in Lower Manhattan, New York City. The tower is located on a city block bounded by Gr ...

, occupying 1,202,900 sq ft (111,750 m²) (64 percent of the building) which included floors 28–45.

Sale to Morgan Stanley

During the

2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...

, Citigroup suffered large losses in its retained

collateralized debt obligation A collateralized debt obligation (CDO) is a type of structured finance, structured asset-backed security (ABS). Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing Mortgage-backed se ...

exposure (loans that Citi underwrote but was not able to sell), and had to be rescued by the U.S. federal government. They decided to sell or close "non-core" businesses in order to raise money. On January 13, 2009,

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,

and

announced they closed early on the launch of their joint venture that combines Morgan Stanley's wealth management unit (including many former Dean Witter 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