It’s official: Citi agreed to hand over (for a handsome sum) ownership duties of the old fashioned money-making wealth management unit Smith Barney to perennial No. 2 investment bank turned holding company Morgan Stanley.
The deal will give Morgan bragging rights to the largest brokerage staff in the U.S., as its 18,000 financial advisors (post-deal) will eclipse the 16,000 employed by Merrill Lynch, which today, it was announced, will be officially known going forward as Merrill Lynch Wealth Management, while its North Carolinian parent company will go by the extended moniker Bank of America Merrill Lynch (that is, BofAML).
The Smith Barney deal was a much needed one for Citi, which could use the cash as bad as a Bernie Madoff investor from the Sunshine State. Sadly, it also signals the end to Citi’s model of offering every financial service under the stars to clients (a model which just as recently as a few years ago seemed like the one to beat), and the beginning of a smaller type of firm, anchored by consumer banking clients and buttressed by investment banking services—for the time being, that is.
It likely won’t be long until Citi’s investment banking unit, or at least some units within its investment banking unit (which grew out of the once-revered red-suspendered men—and maybe a woman or two—of Salomon Brothers) go the way of old Smith Barney: out the door for some cold hard cash.
As for BofA’s name change, the bank wisely tagged on to its own name those two words beginning with M and L that together never fail to conjure images of a bronze bull ready to pounce.