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Morgan Stanley And Citi Launch Joint Venture Morgan Stanley Smith Barney

1 June 2009

Adds Option Exchange and Modification Accounting Functionality

Morgan Stanley Smith Barney Is New Industry-Leading Franchise With Over 18,500 Financial Advisors. Combination of World’s Top Wealth Management Brands Offers Clients Unrivalled Global Platform, Intellectual Capital and Research Resources

New Global Leader in Employer Equity Plans

NEW YORK, June 1, 2009 – Morgan Stanley (NYSE: MS) and Citi (NYSE: C) today announced the closing of their Morgan Stanley Smith Barney joint venture, which creates a new wealth management firm with over 130 years of experience. Originally targeted for the third quarter of 2009, the closing was achieved ahead of schedule.

As previously announced, Morgan Stanley Smith Barney combines Morgan Stanley’s Global Wealth Management Group with Citi’s Smith Barney, forming a new global leader in servicing employer equity plans. Leveraging the combined strengths of two leading global brands in wealth management and stock plan services, the new Morgan Stanley Smith Barney features:

Over 18,500 world-class financial advisors, including 33 of the top 100 financial advisors on the Barron’s 2009 “Top Advisors” survey
In 2008, Global Stock Plan Services led the industry in overall Client Satisfaction and Client Loyalty scores in a survey by Group Five, an independent research firm 1
Servicing over 500 corporate clients world-wide and 4.4 million employee participants, trading on 12 global exchanges, the Global Stock Plan Services business is a leader in equity compensation services
1,000 brokerage locations around the world, and Customer Service Centres in the Europe, Asia-Pacific and the US, Global Stock Plan Services’ Customer Service Representatives are available to assist your participants in real time in their own languages.
Global Stock Plan Services has offices in New York, London, Barcelona and California, where we support our corporate clients by helping them manage their equity compensation plans.
Our award winning Benefit Access website provides participants with information in multiple languages, including Chinese, French, German, Japanese, Malay, Portuguese, Spanish, with plans to roll out Finnish and Swedish in near future. In addition, we can convert employee participant account balances into over 130 different currencies
“Morgan Stanley Smith Barney perfectly complements Morgan Stanley’s traditional leadership position in the global institutional markets,” said John Mack, Chairman and CEO of Morgan Stanley. “It is a clear industry leader that will be the premier choice for clients and high-quality financial advisors around the world, who will benefit from an unrivalled global platform, a vast array of products and services and the powerful intellectual capital that both firms bring to this venture.”

Both Morgan Stanley and Citi will access the joint venture for retail distribution and each firm's institutional businesses will continue to execute order flow from the joint venture.

James Gorman, Morgan Stanley Co-President and Chairman of Morgan Stanley Smith Barney said, “Morgan Stanley Smith Barney’s 18,500 financial advisors are some of the most talented and productive in the industry and include eight of the top 10 advisors ranked by Barron’s magazine. As we continue to grow, we look forward to offering our clients even greater value through new and exclusive products and services.”

Charles Johnston, President of Morgan Stanley Smith Barney, said, “Now, more than ever, investors need advisors they can trust, and the entire team at Morgan Stanley Smith Barney is ready to help our clients navigate these challenging markets. We are reinventing the wealth management firm to deliver the best advice, superior service and the most innovative financial solutions to every client. Looking ahead from my 20 years at Smith Barney, I’m confident that Morgan Stanley Smith Barney will set the new industry standard for success.”

About Morgan Stanley

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 36 countries. For further information about Morgan Stanley, please visit

About Citi

Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 140 countries. Through its two operating units, Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Additional information may be found at or

Forward-Looking Statements

Statements about the expected effects, timing, benefits, financial and operating results, synergies and cost savings related to the joint venture and all other statements in the press release, other than historical facts, constitute forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made and which reflect current estimates, projections and expectations. Any such statement may be influenced by factors that could cause actual outcomes and results to be materially different from those projected or anticipated. These forward-looking statements are subject to numerous risks and uncertainties. There are important factors that could cause actual results to differ materially from those in any such forward-looking statements, many of which are beyond the control of Morgan Stanley and Citi (collectively, the “Companies”), including (1) the risks associated with business combinations, (2) the impact of general economic and industry conditions, (3) adverse changes in the stock markets, the public debt markets and other capital markets, including changes in interest rate conditions and the impact of such conditions on the joint venture’s business, (4) changes in retail investor participation in the markets, (5) capital expenditure requirements, (6) projected synergies and cost savings from the joint venture may be less than expected or may not be realized within the expected time frame, (7) the businesses of the Companies that are contributed to the joint venture may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected, (8) operating costs, customer and employee loss and business disruption following the creation of the joint venture,including difficulties in maintaining relationships with employees and customers, (9) U.S. or foreign legislative or regulatory requirements applicable either to the Companies of the joint venture, or changes in such requirements, including changes in trade, tax, monetary and fiscal policies and laws, as well as any changes in bank or broker-dealer regulation, may adversely affect the businesses in which the joint venture is engaged, (10) competition among financial services companies, including with respect to both customers and employees, and its effect on product and service pricing, joint venture operation costs, customer and financial advisor retention, other third- party relationships and revenues, (11) the impact of changes in accounting standards, rules or interpretations, (12) litigation liabilities, including costs, expenses, settlements and judgments which may adversely affect the joint venture or its business and (13) the impact of political conditions in the U.S. and abroad both generally and as they pertain to financial services companies specifically. The actual results or performance and expected synergies of the joint venture could differ materially from those expressed in, or implied by, these forward-looking statements. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of either of the Companies or the joint venture. For a discussion of additional risks and uncertainties that may affect the future results of the Companies, please see each of the Companies' periodic reports filed with the Securities and Exchange Commission and available on

1 Source: Group Five - 2008 Equity Compensation Plan Administration Benchmarking Study

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