(Corrects first name of equities head Forlenza in fourth paragraph to Peter, not Richard)
By Jed Horowitz
NEW YORK, May 16 (Reuters) - Jefferies Group has hired Michael Armstrong, a former head of private wealth management at Morgan Stanley, to run its small wealth-management group, according to several industry sources.
Armstrong will join next week to oversee almost 50 brokers in Jefferies’ nine wealth management offices in the United States, London and Dubai. The brokers primarily sell investments and financial planning services to employees of Jefferies’ middle-market investment banking clients and to employees of Leucadia National Corp, Jefferies’ parent company.
Armstrong replaces Mark Peters, who left in late December to join hedge fund Whippoorwill Associates after expressing frustration over restraints on the growth plans he had for the wealth division, according to people familiar with his decision. Peters, who did not return calls for comment, had joined Jefferies in 2009.
Armstrong, who is expected to begin at Jefferies’ Manhattan headquarters next Thursday, will report to Peter Forlenza, the firm’s global head of equities. Armstrong did not return messages left on his cellphone.
In his 25-year career at Morgan Stanley, Armstrong shifted between managing sales of fixed-income products and services to middle-market companies and working with retail brokers.
From late 2007 through April 2010 he oversaw about 500 brokers as managing director in charge of Morgan Stanley’s private wealth division, which focuses on individuals and families with $25 million or more to invest. He also ran international wealth management, and was in charge of global capital markets at the wealth division when he left Morgan Stanley at the end of 2012.
His resume gibes well with Jefferies profile as a debt trading firm and an investment bank focused on middle-market companies, sources said. Jefferies has dipped its toe into wealth management to lock in banking clients by helping executives of the companies manage their private wealth.
Unlike giants such as Morgan Stanley, which has more than 17,000 brokers, Jefferies’ wealth unit is too small to promote as a distribution network for selling the stocks and bonds of its corporate clients. Earlier this year, the firm reached an agreement to sell those companies’ initial public offerings and follow-on stock offerings through discount broker E*Trade Financial Corp.
Morgan Stanley, the world’s biggest brokerage firm as measured by its sales force, has been promoting more collaboration between its wealth management and investment banking areas. Earlier this week, it promoted Eric Benedict, who ran its middle-market capital markets unit, to head the private banking unit for “ultra-high-net-worth” clients that Armstrong once led. (Reporting by Jed Horowitz)