The first 725,000 Smith Barney customer accounts moved over to a fresh Morgan Stanley system over the President's Day Weekend. Algo-driven, personalized training of financial advisors and client support personnel is key to the move of records involving nearly $1 trillion in assets.

Over Presidents’ Day Weekend, Morgan Stanley brought the first 10 percent of Smith Barney customer accounts over from their digital homes on Citigroup information systems.

The 725,000 accounts were fed into a fundamentally new system that will serve the combined Morgan Stanley Smith Barney brokerage operation.

The accounts were in place and operating without interruption, when business opened on Tuesday, February 22.


So smooth was the transition that two bigger switches will now take place in May and July. In each of those moves, another 45% or 3.2 million accounts will come onto the Morgan Stanley Smith Barney platform.

All told, accounts with nearly $1 trillion in them will be online, three years after the joint venture in broking and financial advice got its start in June 2009, in the wake of the subprime mortgage credit crisis that erupted in fall 2008.

But this story of this transition is not that much about technology. If you were to ask Tom Gooley, the head of operations, or Moira Kilcoyne, the head of technology for the joint venture, what the three keys were, they might sound like real estate salespeople. They’d likely respond:

Training. Training. Training.

That’s because there was not just a transition of Smith Barney accounts onto a wholly new platform, but Morgan Stanley accounts as well. And, most critically, 16,000 financial advisors from the two firms that had to be ready to pull up accounts and serve customers effectively, from day one. Whatever their personal Day One happened to be.

To get ready for the Smith Barney transitions, the technology team for the MSSB joint venture staged eight mock tests and dress rehearsals, in advance.

This allowed the team to see if they could in fact safely transfer the customer data, how that data would interact with the new system and how they should go about cleaning up any problems, like the effect on accounts of corporate actions such as stock splits.

The tests also allowed the company to see if it could handle the onslaught of 7.2 million accounts, when they were in place. “That’s something you don’t want to leave to chance,’’ said Kilcoyne.

What they found let them redesign the so-called critical path that data would take in moving from one system to another. And told them they had to add a lot more processing capacity to handle the 10,000 processes that would be running simultaneously.

But figuring out that the venture would need to triple the amount of processing power on hand and add 50 percent more operations people to oversee what was going on might be considered the easy part.

Moving over 7,000 Morgan Stanley advisors and 9,000 Smith Barney advisors would be where the digits hit the wall. Or not.

Either they could work the system and keep their customers. Or not.

Development of the new system, replacing separate Morgan Stanley and Smith Barney systems, took the first 18 months of the project. Then, in 2011, the Morgan Stanley advisors were brought onto the new system. This year, it’s time for Smith Barney’s advisors to get started.

“The whole exercise of getting people in the door and training people on a new platform and educating the field out there, the financial advisors and the client support associates who actually sit in the branches, was a lot of effort and energy,’’ said Gooley, the operations chief. “We spent quite a fair amount of time doing that and making sure that had all the appropriate information at their finger tips.’’


A linchpin to making sure the training was both effective and efficient was … an algorithm.

The operations and technology team had each advisor and each client support person fill out a survey on what they did on a regular basis.

Based on what each person responded, they would get a personalized set of trading modules, about the new platform.

The algorithm would react to the responses in each survey and create a training program based on that person’s duties and the business model of that MSSB branch.

For this purpose, Morgan Stanley created, in advance, 163 recorded training sessions totaling 22.5 hours of instructions. Handouts included 322 Quick Reference Cards and Change Pages, that showed how procedures or retrieval of information changed in the new system, and compared the new to the old.

But not all the training was online, using the pre-recorded sessions.

The operations and technology team also sent trainers out into the field. The basic ratio: One trainer for each 25 persons in a branch, to provide personalized training, said Kilogoyne.

The education was a mix of online recorded sessions and in-branch training. The blended approach allowed advisors to take up to 80 percent of their instruction with an in-branch trainer.

Each trainer would show up a month before a conversion, provide instruction and assistance through the changeover … and then stay for a month afterward.

On top of that, training was delivered through as many educational channels as could be conceived.

The training modules could be delivered through online means, through classrooms, through one-on-one sessions, through group sessions, through casual lunch-and-learns.

“I think there was a recognition that people learn in different ways, in addition to the fact that they have different needs,’’ said Kilcoyne. “And so we spent a lot of time and energy trying to customize training for people so that people could absorb it in the way people absorb information.’’

“We took a multi-asset approach to training,’’ she said.

In the end, financial advisors would go through 37 training modules, each, on average. Each would go through two hours of training in “required essentials” and another hour of specialized business training on areas each needed to be familiar with, such as annuities or alternative investments.

The client support associates each get about 6 hours of training. This includes 51 Essentials Courses, as well as review sessions just before the system conversion.

Then there are 24 Core training courses, that users will follow up on right after conversion and two Productivity courses, for users comfortable with the changes who want to go deeper.


Every user was scheduled to complete a one-on-one “show-me” session with a trainer where the person would go over key activities and daily routines and  validate that critical tasks were learned. 

There was a clear benchmark on how well this multichannel, algorithmically-driven, personalized and in-person training program worked.

The company has two call centers. The joint venture oversaw the addition of about 15 percent more support personnel to each center, to handle an expected flood of calls about the seven years of records being switched over, which involved 2 billion documents, 750 million historical transactions and 12 trillion bytes of images of account statements and account opening documents.

“We were expecting just tons and tons and tons of questions into our call centers in these last two weeks,’’ said Kilogoyne. “

The trainers contained questions on how to perform different functions of the new broker workstation, dubbed 3D, said Gooley. That left calls on supposedly broken system problems – like incorrect displays of information on customers and their accounts – to come in to the call center.

“The rate of questions and the nature of questions has been incredibly mild. We just really haven’t seen the flood that we had been expecting,’’ said Kilcoyne. “And I think we attribute that to the fact that the trainers are on the ground with people helping them acclimate. So we haven’t seen crazy blips in our support calls.’’

Tom Steinert-Threlkeld writes for Securities Technology Monitor.