Stock brokerages reported a slim loss in workers in the past year as the major markets posted mediocre gains.
Overall, Orange County stock brokerage employment fell 1% to 2,182 workers, with the number of registered representatives, or brokers, also declining 1% to 1,394, according to this week’s Business Journal list, which ranks the county’s top 20 brokerages by number of OC employees.
Employment at stock brokerages generally reflected the performance of national stock markets. All of the major indexes have posted modest gains in the past year.
The Dow Jones Industrial Average was up 2% during the past 12 months, with the S & P; 500 index gaining 6% and Nasdaq rising 8%.
Stock brokerages likely are wary of adding many new workers amid higher interest rates, natural disasters and rising fuel prices.
“The industry has just contracted,there’ll be more consolidation because the big firms continue to let go of their brokers,” said Grant Bettingen, president of Grant Bettingen Inc., a Newport Beach-based boutique brokerage that checked in at No. 15 on the Business Journal’s list this year.
The brokerage, which has been operating in OC since the early 1970s, reported 41 OC employees, unchanged from a year earlier.
Overall, seven companies posted employee gains in the past year, with six reporting a decline and four unchanged. Three of the brokerages declined to provide employment numbers and are Business Journal estimates.
The biggest change on the list came at the top: co-No. 1 Merrill Lynch & Co., with a 3% jump in employees to 316 and co.-No. 1 Smith Barney Inc., which reported a 6% gain to 316.
Both Merrill Lynch and Smith Barney, a unit of Citigroup Inc., moved past Morgan Stanley, which posted a 12% decline in local workers to 295.
No. 3 Morgan Stanley has faced upheaval on the national level in the past year. Struggles at its brokerage unit led to a campaign by dissident Morgan Stanley investors to oust former chief executive Philip J. Purcell, who announced in June that he would retire as chief executive and chairman.
Mack: More Wealthy Clients
Current Morgan Stanley Chief Executive John Mack has said he wants to attract wealthier clients. In August, Mack said Morgan Stanley planned to cut 1,000 underperforming brokers. In OC, Morgan Stanley trimmed its registered brokers by 16% to 210.
Local Morgan Stanley officials in Santa Ana declined to comment on the Business Journal’s list. New York spokeswoman Erica Platt wouldn’t comment on local issues but pointed to layoffs “on the national scale,” and a desire to focus on very wealthy clients.
Meanwhile, Merrill Lynch said it has restructured its OC operations, including bringing in more management to focus on the region. Its growth here marks a reversal. Last year Merrill Lynch cut 13% of its local workers. A year earlier it posted a 10% decline.
Jodi Rolland, regional managing director for Merrill Lynch’s Southern California region, recently moved here from Princeton, N.J., where she was the brokerage’s national sales manager.
Gregory Mech, who formerly ran the office and oversaw six states, has been given a bigger job of overseeing the Western division that extends from the Pacific Northwest, some mountain states and to the south along the border with Mexico.
“We are clearly in a growth mode, not only adding management but adding financial advisers and other positions that go along with it,” said Rolland, who expects to grow Merrill Lynch’s local workforce by roughly 5% in the next year.
No. 4 UBS Financial Services Inc. in Orange retained its ranking with an estimated 265 employees, including 135 brokers.
No. 5 Wachovia Securities LLC in Newport Beach reported an 18% drop in total employment to 163 and a 26% decline in brokers to 98.
Wachovia, which bought Prudential Securities Inc. more than two years ago, now counts two local offices after a consolidation.
“We continue to grow on an asset basis,” said Jerry Conn, senior vice president and branch manager for Wachovia Securities in Anaheim.
Newport Beach-based Roth Capital Partners LLC, Wells Fargo Investments LLC in Newport Beach and A.G. Edwards & Sons Inc. in Irvine held their positions and rounded out the top eight spots on the list.
“We are seeing a lot of consolidation in this market since the late 1990s, with investment boutiques being gobbled up,” said Matthew Healy, senior regional investment manager and vice president of Wells Fargo Private Asset Management Group in Newport Beach.
Earlier this year, Wells Fargo completed its buy of Strong Capital Management, adding more than $34 billion in mutual fund assets under its management.
“I wouldn’t be surprised to see that kind of consolidation continue,” Healy said.
Meanwhile, J.P. Morgan & Chase Co. said it plans to reopen in OC before the end of the year. It consolidated an OC office with its Los Angeles operations during the past two years.
“We plan to hire four brokers in Orange County,” said John W. Miller, a managing director of J.P. Morgan Securities’ entertainment group. “We want our brokers living in the community.”
