With the two-year anniversary of the creation of Morgan Stanley Smith Barney, the industry's largest brokerage business continues to take shape.

The continuing transition was immediately evident in January of this year, when Greg Fleming took the helm as president of global wealth management, replacing Charles Johnston. Since then, Fleming has continued to mold the wealth management business that was created in 2009 when Morgan Stanley struck a deal for the then Citigroup business. Under the terms of that deal, Morgan Stanley obtained 51% ownership at the time, with the ability to increase its stake to 100% in five years.

From his position, Fleming has continued to sharpen the focus and leadership of the business. Reports emerged in March that MSSB could drop the Smith Barney name.

The firm also planned to streamline its advisor force in the first quarter by cutting 200 to 300 low producing advisor and trainee positions, a source familiar with the situation confirmed in March. Those changes pinned the firm's estimated advisor head count at 17,800. Fleming capped those changes in April when he revamped the business' organizational leadership.

According to the internal memo from Fleming, MSSB lured JPMorgan executive and Smith Barney veteran Jeff Hack to the position of chief operating officer. In that role, Hack will also be tasked with leading MSSB's profitability, continuing technology and operations integration and global risk management business.

Hack was most recently chief operating officer of the worldwide securities services business at JPMorgan. He also previously served for 10 years at Smith Barney in positions including chief financial officer and chief operating officer.

Fleming's appointments also shifted internal roles at the firm. Craig Pfeiffer was named vice chairman at MSSB, after serving as head of marketing and the client experience. In his new role, Pfeiffer, together with Vice Chairman Ray Harris, will act as senior management to branch financial advisors and managers and lead other initiatives.

Ben Huneke has been named head of strategy and business management and will also serve as a senior liaison to the MSSB's international business, Morgan Stanley's institutional business and corporate functions supporting the firm. He previously served as head of office of business management for the U.S. wealth management business.

Michael Armstrong will now focus solely on his role as head of capital markets.

Paul Hatch, who is head of investment strategy and solutions, will now lead a combined organization called Investment Strategy and Client Solutions. With that move, Hatch now has responsibility for corporate equity solutions, retirement services and wealth advisory resources.

Michelle Oroschakoff now takes on the role of chief global risk officer after previously serving as chief administrative officer.

The changes reflect a transition to Fleming's leadership, and were laid out in the memo, says MSSB Spokesman Jim Wiggins. "I am pleased to announce some organizational changes designed to accelerate our momentum, further align our structure to serve FAs and clients, and prepare for the post-integration phase of our business," Fleming states in the memo.

The moves could also signal a fine-tuning of strategy and an increased focus on profitability for the firm, says Alois Pirker, research director at Boston-based financial services research firm Aite Group.

"I think some of it is defining the post-merger entity," Pirker says. "'What do you want to be when you're done with this integration?' kind of thing... Some of it might be correcting decisions that were made earlier on and have proven to be less than perfect."

While changes to operations are certainly tied to profitability, any changes directly affecting the advisor force need delicate care, Pirker says. That includes name changes to the brand, which advisors would have to explain to clients, and technology integration, which would affect how they do business.

But any changes to streamline redundancies after a large integration are nothing to be shocked about, says Scott Smith, associate director at Boston-based financial research firm Cerulli Associates. "There's an expectation of having to have some catharsis during the few years after a merger of this scale," Smith says. "I think it will probably continue as they overcome some of the obstacles that were in place."

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