(Bloomberg News) After Morgan Stanley took control of Smith Barney in May 2009 from Citigroup Inc., David Hopkins grew disillusioned with his new bosses.

Hopkins, 50, says he had built a roster of about 150 clients with $38 million in assets in nine years as a stock broker at Smith Barney in Southern California. After the acquisition, the New York-based bank imposed new maintenance fees on Smith Barney accounts and stripped away some of the autonomy of its brokers -- moves that Hopkins says were hurting his relationships with investors.

In March, Hopkins got a call from a headhunter who urged him to join a small advisory firm that works with TD Ameritrade Holding Corp., a discount brokerage. Although it meant Hopkins would have to return a retention bonus from Morgan Stanley worth a year's earnings, he decided to depart for Beacon Pointe Advisors LLC in Newport Beach, Calif., Bloomberg Markets magazine reports in its December issue.

"Smith Barney had a very hands-off environment, like you knew what was best for your clients," Hopkins says. "With Morgan Stanley, it just became an unfriendly place. Smith Barney is dying a slow death. It's all about Morgan Stanley."

More than 7,300 brokers have left the four biggest full-service brokerages -- Morgan Stanley Smith Barney, Merrill Lynch, Wells Fargo Advisors and UBS Wealth Management Americas -- from the beginning of 2009 through June, according to financial services research firm Aite Group LLC in Boston and company filings.

Losing Assets

Some brokers have fled internal clashes from mergers during the financial crisis: Bank of America Corp. rescued Merrill Lynch four months before the Smith Barney deal. Others have been recruited by discounters such as Charles Schwab Corp. to join their networks of independent firms.

The big banks, which count on their brokerages to generate a steady stream of fees, are losing assets as well as brokers. Assets under management at the four top brokerages dropped 16% to $4.75 trillion from 2007 through 2009, Aite Group says. During the same period, assets jumped almost 14% to $1.54 trillion at independent firms.

"It's hurting the big brokerages," says Alois Pirker, an Aite Group research director. "They have lost assets, advisers and clients."

Morgan Stanley says the loss of brokers and assets has been inconsequential. Spokesman Jim Wiggins says the bank is sorry to see employees depart who are frustrated by a lack of success at Morgan Stanley, which doesn't compete on price for clients with low-cost brokerages.

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