Morgan Stanley will cut about 1,000 of the financial advisers in its underperforming retail brokerage, the US investment bank said in an internal memo on Thursday. The memo from co-President Zoe Cruz, which was obtained by Reuters, also said the Wall Street firm will cut the number of new broker recruits to 1,000 in 2006 from 2,400 this year but would continue to hire experienced brokers focused on wealthy clients.
The firm currently has about 10,500 brokers and plans to cut about 10 percent after it identifies those "who are not up to our standards," the memo said.
John Schaeffer, the head of the brokerage unit who stepped down earlier in July, will be replaced by Ray Harris, managing director and head of client solutions, on an interim replacement.
The changes at the investment bank, which had in recent months been roiled by investors and former executives working to topple former Chief Executive Philip Purcell, were being considered before Purcell left the firm, said a source close to the situation.
Purcell was replaced by former Morgan Stanley President John Mack on June 30.
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