With Sallie Krawcheck taking the helm of Bank of America–Merrill Lynch’s wealth and investment management business, an old rivalry is new again. Krawcheck, previously the CEO of Citigroup’s Smith Barney, is now competing against her old firm, which formed a joint venture with Morgan Stanley’s brokerage unit earlier this year.
Coincidentally, leading Morgan Stanley Smith Barney is James Gorman, who headed Merrill Lynch & Co.’s brokerage from 2001 to 2006. Krawcheck and Gorman, with their roles switched, are vying in a much more consolidated industry. BofA–Merrill Lynch’s brokerage boasts $1.8 trillion in client assets and approximately 15,000 brokers. MSSB holds $1.4 trillion in client assets and 18,444 brokers. Alois Pirker, research director at Boston-based consulting firm Aite Group, says the coincidence points to the level of turmoil in the industry. “It’s musical chairs among those who are able to keep their good reputation,” notes Pirker.
