Citigroup Moves Up Morgan JV

How the Mighty Have Fallen (But Still Scratch to Stay in the Room)

Early today, two venerable names of the Dow Jones Industrial Average -- General Motors (GM) and Citigroup (C - Analyst Report) -- were announced they are being replaced by Cisco Systems (CSCO - Analyst Report) and Travelers (TRV - Snapshot Report), respectively. While GM’s is the result of its pending bankruptcy, Citi's is the result of its share price remaining at such a depressed level for so long.

With Citigroup’s removal from the Dow Jones Industrial Average, that just leaves two traditional banks remaining within the index -- Bank of America (BAC - Analyst Report) and JPMorgan Chase (JPM - Analyst Report). The inclusion of Travelers could be viewed as an attempt to restore some of the financial industry’s representation in the Dow Jones Industrial Average, considering that American International Group (AIG - Snapshot Report) was replaced by Kraft Foods (KFT - Analyst Report) in September 2008.

However, it would seem that Citigroup is far from just taking it on the chin. To that end, both Morgan Stanley (MS - Snapshot Report) and Citigroup today announced that they have closed their previously announced wealth management joint venture ahead of schedule. The joint venture was targeted for completion during 3Q09. The joint venture will operate under the banner Morgan Stanley Smith Barney.

The entity combines Morgan Stanley's Global Wealth Management Group with Citi's Smith Barney in the U.S., Quilter in the UK, and Smith Barney Australia retail units. This newly combined global new wealth management firm currently has 18,500 financial advisers in 1,000 brokerage locations.