M. Stanley, Citi venture keeps brokers waiting -FT
NEW YORK, June 14 (Reuters) - Morgan Stanley (MS.N: Cotización) and Citigroup Inc (C.N: Cotización) will have to wait up to two years to gain the full benefits of their brokerage joint venture as the complexity of merging information technology systems delays integration, the Financial Times reported.
The IT issues are frustrating some of the 18,500 financial advisers of the new business who had expected to be able to sell products from both firms to their clients, the paper reported on Sunday, citing unnamed people close to the situation.
The retail brokerage joint venture, named Morgan Stanley Smith Barney, started earlier this month, ahead of schedule.
The brokerages had originally planned for the venture to start in the third quarter, but moved the date up to reassure brokers and customers unsure about how they would fit into the combined unit, James Gorman, chairman of the joint venture, told Reuters on June 1.
As part of the deal, Morgan Stanley is paying $2.75 billion to Citigroup, and owns 51 percent of the venture.
The two companies have said the new venture will employ 18,500 advisers and generate $14 billion in revenue.
The difficulties of integrating IT systems means that Morgan Stanley's financial advisers will not be able to access products from Citi's capital markets business, and vice-versa, for months, the Financial Times reported.
Morgan Stanley and Citigroup were not immediately available for comment. (Reporting by Anupreeta Das and Steve Eder; Editing by Lincoln Feast)
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