Shaw and Partners Co-CEO says ‘fed-up’ Morgan Stanley brokers walked News07 May 2024

Shaw and Partners co-chief executive Earl Evans says the advisers who turned their backs on Morgan Stanley to join his firm were fed up with its American-style of management and governance.


Fifteen Perth-based Morgan Stanley Wealth Management employees, including 10 advisers, jumped ship to Shaw, bringing with them about $2.5 billion in funds under management.


Shaw also picked up five advisers from Ord Minnett as part of an aggressive hiring spree in the west. The broker has become the new home of about 25 Morgan Stanley employees over the past six months.


Mr Evans said it was not uncommon for Wall Street firms like Morgan Stanley to struggle in local wealth management despite their size and expertise in other jurisdictions.


“American firms come in and have a tendency to overlay their American footprint and style, and sometimes it doesn’t go well with the Australians,” he said.


“They try to put a global regulatory regime in place and a lot of those regulations just don’t apply to Australia, and it’s quite overbearing. It has a tendency to turn off a lot of the staff, especially in the wealth side of the business.”


Mr Evans pointed to a history of wealth management turnover: “Goldman did it in Australia in 2007 when they bought JBWere and the business virtually imploded on the wealth side with a mass exodus,” he said.


“Merrill Lynch had three goes at trying to make wealth work in Australia. It hasn’t worked.

“Morgan Stanley are a phenomenal franchise around the world, no question. But I think on the wealth side in Australia, they really have struggled.”


Mr Evans said Morgan Stanley had accumulated some top talent along the way, and they were now at Shaw with a loyal roster of clients.


“We’ve been the beneficiary of some recent changes that they made whereby the advisers just said ‘enough’s enough’,” he said. “And we’ve been a beneficiary of that, which has been awesome.”


Mr Evans and Shaw co-founder Allan Zion were in Perth on Monday for the official opening of new offices on the 47th floor of what was once known as Bond Tower in St Georges Terrace.

Shaw has spent $7.5 million refitting what were once South32’s conference and meeting rooms to accommodate an expanded staff of 51 people.


The broker had five advisers in Perth until its 2019 acquisition of local stockbroker DJ Carmichael took the number to 20. The DJ Carmichael deal came in the thick of consolidation in WA that saw Canaccord Genuity gobble up Patersons Securities and Hartleys merge with Euroz.


Shaw, owned by Swiss firm EFG International, has about $35 billion under management, including more than $5 billion of wealth in WA.


Mr Zion, the co-CEO alongside Mr Evans, plans to retire from his executive role on June 30 but will stay on as a board member.


Article source: AFR, 7 May 2024 

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