* Maryland team Wallace and Ehrlich join Morgan Stanley
* Dallas broker Sparkman joins Wunderlich Securities
* Recruiters say 20 Morgan Keegan advisers left since June
By Joseph A. Giannone
Dec 13 Regional brokerage Morgan Keegan has
lost three more financial advisers to rivals in the past week,
the latest in a score of departures since parent Regions
Financial put the unit up for sale in June.
Last Wednesday, Chris Wallace and Sarah Ehrlich left Morgan
Keegan's Rockville, Maryland, office to rejoin Morgan Stanley
Smith Barney in nearby Gaithersburg, FINRA records show.
The duo, which generated $1.35 million of revenue in the
past year, had left Morgan Stanley in early June to join
Morgan Keegan -- just weeks before Regions announced it was
putting the Memphis-based brokerage and investment banking unit
up for sale.
Morgan Keegan advisers on average generated more than
$300,000 a year in commissions and fees, so the loss of a $1
million team is significant.
Meanwhile, Dallas broker Howard Sparkman, a 17-year veteran
of Morgan Keegan, left to join Wunderlich Securities on Friday.
He follows in the footsteps of Morgan Keegan alumnus James
Parrish, who after 23 years at the firm joined Wunderlich in
May as co-president of its private client group.
Defections from Morgan Keegan are slowly eroding its value,
which has recruited almost no experienced brokers to replace
roughly 20 departures since June, including 10 who collectively
managed about $700 million in assets.
"The firm is suffering death by a thousand cuts," said Ron
Edde, a broker recruiter at Armstrong Financial Group in
Morgan Keegan had 1,218 financial advisers as of the end of
October, six more than in mid-September. That figure includes
rookie advisers coming up through the firm's training program.
Alabama-based Regions bought Morgan Keegan for $789 million
in 2001, part of a wave of bank-broker combinations. Regions
has struggled since the financial crisis, and remains one of
the few major banks that still has not repaid its 2008 U.S.
Regions on June 22 said it was putting the unit up for
sale, the same day the bank agreed to pay $200 million to
settle with regulators over Morgan Keegan's sales of bond funds
that cratered in value during the financial crisis.
The auction has dragged on as a succession of private
equity buyers and rival brokerages walked away from Morgan
Keegan or else submitted bids deemed too low by Regions. The
bank's executives have assured shareholders they expected to
announce some resolution to the sales process soon.
The lack of certainty, though, has made it more difficult
for Morgan Keegan to recruit or retain advisers.