Davy loses eight staff to Morgan Stanley

Davy Stockbrokers yesterday lost eight senior staff in its private clients' division. The eight, including one director, are understood to have defected to rival Morgan Stanley Quilter.

The British private client division of the US merchant bank is reported to be planning to open an Irish operation as soon as April.

Seven of those leaving Davy are portfolio managers in the private client division, while the eighth is an assistant portfolio manager. The director has been named as Mr Brian Weber, who was in charge of Davy's premier trading service.

Market sources said the defections would be a major blow to Davy, despite its size. The company is understood to have 20 portfolio managers in the private clients division.

The eight handed in their notice yesterday and will have to serve out a month's notice. Under their contracts, they are precluded from contacting existing clients now or in the future. Apart from Mr Weber, they were named last night as Mr Donncha Fox, Mr Gareth Stingemore, Mr David Frame, Mr Eoghan Murphy, Ms Maria Delany, Mr Stephen Rooney and Mr Kevin Ronayne.

A spokesman for Morgan Stanley declined to comment on yesterday's surprise move but sources close to the company confirmed it was planning to open an operation in Dublin.

"The company probably did not know precisely when these guys were going to walk but it was just a question of timing," said one person familiar with the company. "The decision to move yesterday was almost certainly determined by the notice they have to serve."

Davy moved quickly to fill the gaps, saying it was disappointed to lose the staff but was taking steps to promote other members to the vacant positions as well as recruiting staff outside the firm.

Mr Patrick Cooney, deputy head of Davy's private client division, said the company was moving to notify its clients of the position and did not expect to suffer from the defections.

"It is for reasons like this that Davy places such a great emphasis on teams in the organisation."

Acknowledging that the timing of the arrival of Morgan Stanley into the Irish private client market as the economy slows down as "unusual", Mr Cooney said Davy was confident it would not lose market share to any firm entering the market.

"We have about 40 per cent of the Irish market and are the largest player," he said. "We get a lot of people trying to compete and this is no different apart from the fact that they have targeted Davy staff.

"In a peculiar way, it is a compliment to our operation that incoming competitors are looking at our staff."

Morgan Stanley Quilter was formed in 2000 with the acquisition by the US bank of the Quilter private client operation from Commercial Union. It has 10 branches in Britain, most recently opening an office in Glasgow 18 months ago, and has about £5 billion sterling (€7.5 billion) under management.

Davy has 120 staff in the private client area, with 50 in the front office, including 10 directors. Mr Cooney alluded to the departing staff as "middle management" and said he was happy that the company had retained its best portfolio managers.

The move comes just days after Davy was named the top research stockbroker in the Irish market in the Reuters/Institutional Investor survey of Europe's leading national research broker teams.

Mr Cooney said clients were more likely to be influenced by that accolade than by the decision of staff to move to a rival.

The last such exodus in the Irish stockbroking market was the defection of a large number of senior staff from NCB to form Merrion Capital in 1999. That was considered one of the most dramatic walkouts in Irish stockbroking history and was led by NCB's deputy managing director, Mr John Conroy.