Morgan Stanley Pursued Like Wounded Wildebeest


It's enough to almost make you feel bad for a big, Wall Street bank. Almost.

The Wall Street Journal is reporting that Merrill Lynch, Bank of America's (NYSE: BAC) investment-banking arm, is on a mission to poach Morgan Stanley's (NYSE: MS) best wealth-management brokers.

Merrill Lynch's wild kingdom
Out of all the banks that survived the financial crash, Morgan Stanley came out limping the most, and has faced a series of recent setbacks, including the botched Facebook launch, that Merrill thinks (read: hopes) has left employees demoralized enough to want to leave.

As such, some of Merrill's top managers will be reaching out to Morgan's top-grossing brokers to try and lure them over. According to The Journal, Merrill has already offered at least one Morgan broker a $1.5 million signing bonus to make the jump.

This couldn't come at a worse time for Morgan, which is pinning much of its hope for rejuvenation on its new wealth-management division: Morgan Stanley Wealth Management. MSWM was born out of the remains of Morgan Stanley Smith Barney, the joint brokerage it still runs with Citigroup (NYSE: C) and just made a deal to buy in its entirety.

Check-waving cheetahs
Post-crash, all of Wall Street is scrambling to find news ways to make money:

  • Goldman Sachs (NYSE: GS) recently opened a private bank-within-a-bank to cater to its wealthiest clients, and it already has $13.8 billion on the books.

  • JPMorgan Chase (NYSE: JPM) just did a cannonball back into European waters, snapping up $728 million worth of a just-issued residential mortgage-backed security, which will earn it a 4% yield: a considerable return in today's yield-tame world.

Morgan Stanley needs Morgan Stanley Wealth Management to work, and for that, it needs its top people to stay. As this story has no doubt already landed on the desk of CEO James Gorman, let's hope he's already formulating a plan (read: seriously lucrative counter-offers) to beat back Merrill's merciless raiders.

Poor Morgan Stanley. It must feel like a wounded wildebeest up against Merrill's fast-gaining cheetah. But don't feel too bad: It's the kind of cheetah that comes waving $1.5 million checks around. Speaking of big banking money, check out The Motley Fool's new in-depth company report on Bank of America. It thoroughly details B of A's prospects and gives three reasons to buy and three reasons to sell. Just click here to get access. Thanks for reading, and for thinking.