Morgan Stanley Cutting Low-Earning Reps ... While Managers Get Wooed Away Hot

Sources within the giant brokerage firm have confirmed to Bloomberg and the WSJ that plans are underway to let low-producing advisors go. If so, the cuts would represent about 1.6% of Morgan Stanley's sprawling 18,000-strong sales force.

As Bloomberg notes, competition within the wirehouses for producing accounts is intense, with both Morgan Stanley and archrival Merrill Lynch generating about $750,000 to $850,000 in revenue per rep.

However, while in theory cutting the weakest performers loose is a time-honored Wall Street tradition, it's interesting in light of a parallel trend: regional managers and star teams are leaving the firm from the top end.

Just today, Robert W. Baird announced that its efforts to poach Morgan managers had brought in another big score in the form of Dean Cottle, who ran several offices for Morgan and will now start a Salt Lake City branch for Baird.

Granted, Baird only has 700 reps to Morgan's 18,000-plus, but it has been recruiting aggressively and at least suggesting that each recruit bring his or her former colleagues across as well.

And rivals like UBS are also busy courting top Morgan producers. A few weeks ago, the Swiss giant lured a $1.1 billion four-advisor team away from Morgan.

Probably not a coincidence that the team had deep roots on the Smith Barney side of the new Morgan "family."