After it became clear that he was not likely to become chief executive, Greg Fleming decided to step down as president of Morgan Stanley Wealth Management, according to a person familiar with the matter.
Fleming had been with Morgan since 2009, and helped the firm grow and adjust following its acquisition of Smith Barney.
A person familiar with the matter, who asked not to be named, said it was an amiable parting, but that Fleming, 52, was perhaps ready to leave in order to find a position as CEO, particularly as Morgan Stanley chief executive James Gorman, 57, isn't likely to retire any time soon.
"He's at the right age to make a move," the person said. "James made it clear that he would be staying on for a number of years as CEO, and that path wouldn't be open to Greg."
In a memo to employees, Gorman praised Fleming's stewardship of the wirehouse.
"Greg has been an asset to the entire firm and to me personally, and I know the board and the rest of the operating committee greatly appreciate his collaboration and friendship over the last several years. Greg has built a great leadership team in wealth management that will continue to drive the success of that business," Gorman said.
During Fleming's time at Morgan, the wirehouse has significantly grown its wealth management business.
At the end of the third quarter of 2015, the wealth management unit reported pretax margin of 23%, up from 21% from the year-ago period and up from 9% for the third quarter of 2010.
The wirehouse has spent considerable effort growing its lending business as well. For the most recent quarter, securities-based lending and other loans rose 32% year-over-year to $26.8 billion while mortgages rose 38% year-over-year to $19.7 billion.
"We overcame the challenges and difficulties of integrating the largest wealth management merger ever, to create an organization that today is the leader by all important measures," Fleming told employees in a memo.
"While the numbers are impressive in terms of client assets, financial advisors, productivity, profitability and the breadth of resources we have at our disposal, what’s most important is the quality of what you do every day. You consistently place clients’ interests first and bring exceptional thinking to bear on the very real problems they face managing their wealth in a highly uncertain world," he said."
Gorman also told employees on Wednesday that Colm Kelleher, president of Morgan Stanley's Institutional Securities Group, will serve as president of the firm. In his new position, he will also have responsibility for wealth management.
Kelleher is a longtime Morgan Stanley veteran, having joined the firm in 1989.
Gorman said in another memo that executives Shelley O’Connor and Andy Saperstein will now serve as the new co-heads of wealth management, and report directly to Kelleher.
O’Connor was named head of field management in 2014 while Saperstein took on the role of co-COO of ISG the following year.