(Bloomberg) -- Morgan Stanley, the biggest financial brokerage, will spend $500 million to improve computer systems after flaws in a previous upgrade frustrated the staff.
Investments in technology will be made over the next 18 months, according to a memo from Greg Fleming, 49, head of its brokerage unit, that was dated yesterday and obtained by Bloomberg News. Brokers complained about glitches and more cumbersome processes last year after New York-based Morgan Stanley switched to a single system for its Smith Barney joint venture with Citigroup Inc.
For us to be the best wealth-management firm for our advisers and clients, we must have the best platform, Fleming wrote. We will not stop until we have achieved this.
Fleming wrote that his top priority for the next year is his advisory business, which takes fiduciary responsibility for managing client funds, rather than just taking commissions on trades. Dow Jones reported on Flemings memo earlier today.
The joint venture was known as Morgan Stanley Smith Barney until last year, when Morgan Stanley moved to buy out New York- based Citigroup. The deal turned Morgan Stanleys wealth- management division into the worlds largest brokerage, with 16,780 financial advisers at the end of 2012.
The division more than doubled fourth-quarter net income to $385 million, helping the company beat analysts estimates. The wealth business surpassed a profit-margin target six months ahead of schedule.
Morgan Stanley has asked regulators for approval to buy the final 35 percent of the brokerage venture from Citigroup after resolving a dispute over the valuation of the business in September.