MS Morgan Stanley

By Michael Wursthorn 

More than a dozen Morgan Stanley employees have left the bank's wealth-management unit to launch their own practice, the latest group of financial veterans to bolt from big, traditional brokerages in favor of independent investment-advisory firms.

Morgan Stanley's Kirk Bahm Group, in Wichita, Kan., said it resigned this month to form investment-advisory firm 6 Meridian LLC. The group, led by 14-year industry veteran Margaret Dechant, is in the process of reaching out to their Morgan Stanley clients to transition most of the more-than $2.2 billion in assets they managed there.

Ms. Dechant said the "complexity and needs" of their clients and the "distractions of a larger firm" drove them to launch 6 Meridian.

Most of 6 Meridian's clients are business owners, corporate executives and medical professionals, and the firm has focused on building in-house portfolios for those investors. As a stand-alone firm, 6 Meridian will be able to expand its investment offerings and conduct due diligence on products and offerings that may not have been possible under a big brokerage like Morgan Stanley, executives of the new venture say.

"Every investment option, investment manager and investment style has to be vetted by a big committee" at Morgan Stanley, said Thomas Kirk III, a 35-year broker who is now a senior managing director at 6 Meridian. "We're much more nimble."

A Morgan Stanley spokeswoman confirmed the departures but declined to comment further.

Investment-advisory firms like 6 Meridian have been multiplying in recent years, taking market share away from the big brokerages where many of the advisers launching those firms got their start. Last year, assets at independent firms increased by 6.2%, while the traditional big brokerages saw their asset base shrink 1.9%, according to Boston-based research firm Cerulli Associates.

Morgan Stanley has suffered other recent departures from its wealth arm. Earlier this month, a team of advisers who managed $427 million in investor assets left Morgan Stanley for Wells Fargo & Co.'s brokerage arm. In August, a $378 million team and a group managing $500 million resigned from UBS Group AG and HighTower, respectively.

Morgan Stanley had slightly more than 15,900 advisers as of June 30 whom, on average, managed $128 million each.

Write to Michael Wursthorn at Michael.Wursthorn@wsj.com

(END) Dow Jones Newswires

September 12, 2016 13:19 ET (17:19 GMT)

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