Citigroup and Morgan Stanley previously agreed to form joint venture and merged their respective retail brokerage divisions.
At the time it allowed Citi to heal their wounds from the financial crises, scale down their financial supermarket, and focus on banking and investment banking.
Morgan Stanley was to maintain a majority interest with the right to purchase the entire group. Morgan Stanley CEO Gorman viewed the option as a means of diversifying away from relying solely upon investment banking and trading.
Lately, the two companies have been embroiled in a heated disagreement as to the value of the firm and the cost of purchasing Citi’s remaining share.
Meanwhile, several dozen big producing brokers, managing billions of dollars in client assets, are contemplating exiting the firm due to technology problems at the firm.
High net worth client money management has bucked the negative economic trend as rich clients seek alternatives to low paying savings accounts.
Successful brokers have been able to procure lucrative signing bonuses from competing firms offered to entice them to leave their current employer and bring their clientele (along with commission business) to the new company.