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By Brett Philbin
Of DOW JONES NEWSWIRES


NEW YORK -(Dow Jones)- Morgan Stanley Smith Barneys Head of Talent
Management Barry Krouk said the brokerage joint venture could bring in about
2,000 trainees this year.

To develop the next generation of brokers, Krouk is taking pages from the
playbooks of both Morgan Stanley and Smith Barney. Since the venture was
formed nearly a year ago, approximately 1,000 professionals have entered the
48-month Financial Adviser Associate Training program.

For major brokerages, known as wirehouses, such programs are pipelines for
developing homegrown talent, some of which could one day become top producers.

Krouk said the firm could hire about 2,000 rookie brokers but added he is
focused more on quality than quantity.

Bank of America Corp.s (BAC) Merrill Lynch has its own broker training
program called Practice Management Development while Wells Fargo & Co. (WFC)
also actively trains rookie advisers. UBS Wealth Management Americas, a unit of
UBS AG (UBS), said its offering training classes, but its broker training
program is on hold.

At Morgan Stanley Smith Barney, trainees are typically professionals who have
been in the work force for more than 10 years, though such experience isnt a
requirement. The firm looks for candidates who have demonstrated success in
other professions, Krouk says.

In Morgan Stanley Smith Barneys four-year curriculum, rookie brokers spend
the first four months in the pre-production phase in which they learn about
wealth planning strategies and gain knowledge about products. In the fifth
month, they go into production and begin to add clients. The third stage begins
in the ninth month when brokers learn more wealth management skills.

Krouk, a Morgan Stanley veteran, said a priority of the joint venture was to
take pieces (of the training programs) from both worlds, which has contributed
to overall retention.

From the Morgan Stanley side, the firm kept a policy of assigning a coach at
the local level to serve as a mentor to new advisers. Such coaches are
typically advisers who worked at either legacy firm for at least two years and
who were in the top quintile in production and length of service.

Many new advisers and coaches elect to form teams once the rookie brokers
complete the training program.

Building relationships with experienced advisers is especially important for
new brokers given the difficulty many had building up business during the
financial crisis and recession. Firms including Merrill Lynch and UBS laid off
such advisers, who are generally lower producers, generating less than roughly
$200,000-$250,000 in annual production.

In an interview, James Young, a Chicago-based adviser in the training
program, said having a coach serves as a guide to the entire process as such
a mentor helps instruct new brokers on how to conduct meetings with clients.

Young, entered Morgan Stanleys training program in August 2008 after a
25-year institutional sales background at Goldman Sachs Group Inc. (GS) and
Bear Stearns Cos.

At Morgan Stanley Smith Barney, the training program also carried over a role
from Citigroup Inc.s (C) legacy brokerage called the national development
officer. Such a manager is responsible for leading the coaches and centralized
training of new brokers when they gather in groups, typically three times
during the first two years of the program.

Krouk praised the development officer position, pointing out that Morgan
Stanley Smith Barney President Charles Johnston held that role at one time.

There are probably 50 managers throughout the (firm) hierarchy that have
gone through the training center as NDOs and kicked off their management
careers in this position, he said.

Krouk said the firm plans to look more into recruiting trainees from college
campuses as several institutions have accreditations toward wealth planning,
but said such efforts are still at the infancy stage.

Trainees in the Morgan Stanley Smith Barney program receive a base salary
with quarterly cash bonuses and year-end stock awards. After the third year,
they are paid as a broker.