Global wealth management JV
Morgan Stanley and Citi Group have formed a new wealth management joint venture.
The two companies announced today that the joint venture, Morgan Stanley Smith Barney, was launching ahead of schedule and was the product of combining Morgan Stanley’s Global Wealth Management group with Citi Smith Barney in the US, Quilter in the UK and Smith Barney Australia retail units into a new wealth management firm.
The new brand will boast over 18,500 financial advisers worldwide.
Commenting on the launch of the joint venture company, Morgan Stanley chairman John Mack claimed it would be a clear industry leader.
Under the terms of the arrangement, Morgan Stanley and Citi will access the joint venture for retail distribution and each firm’s institutional businesses will continue to execute order flow from the joint venture.
Under the final terms of the agreement, Citi will transfer 100 per cent of its Smith Barney, Smith Barney Australia and Quilter retail units for a 49 per cent stake in the joint venture and an upfront cash payment of $2.75 billion.
Morgan Stanley will transfer 100 per cent of its Global Wealth Management business for a 51 per cent stake in the joint venture.
AUTHOR
Mike Taylor
Recommended for you
Lonsec and SQM Research have highlighted manager selection as a crucial risk for financial advisers when it comes to private market investments, particularly due to the clear performance dispersion.
Macquarie Asset Management has indicated its desire to commit the fast-growing wealth business in Australia by divesting part of its public investment business to Japanese investment bank Nomura.
Australia’s “sophisticated” financial services industry is a magnet for offshore fund managers, according to a global firm.
The latest Morningstar asset manager survey believes ETF providers are likely to retain the market share they have gained from active managers.
