While Morgan Stanley spokesmen say the merger with Smith Barney is going swimmingly, sources both inside and outside the company paint a different picture, according to an October 1 article in CNBC.com by John Carney (“Morgan Stanley-Smith Barney Brokerage Merger Hits Snags, Delays”).
Reports indicate that the immediate problem involves Smith Barney brokers being moved from an older server-based platform to Morgan Stanley’s web-based platform. The integration is taking longer and costing far more than expected.
These technological problems are consuming so much time and money that the firm is unable to offer customers the kind of “enriched offerings” it had hoped the merger would produce, according to the article.
Morgan Stanley’s board of directors is reportedly considering pushing back the timeline for completing the merger from September of 2011 to January of 2012.
And there is speculation that Charlie Johnston, the president of the Morgan Stanley-Smith Barney joint venture, may be losing the confidence of Morgan Stanley chief executive James Gorman, so much so that Johnston could be removed from his position.
Morgan Stanley’s spokesman says that the merger is on track and morale among the financial advisers is very high.
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