Goldman Sachs has endured a rough couple of years, so it's no surprise that heads are rolling. The bank is paring down its ranks of commodities traders because the profits to be made from swapping iron, platinum and other metals are down and, in the estimation of CEO David Solomon, unlikely to get back to where they once were. The firm has for decades been Wall Street's premier commodities trader—former CEO Lloyd Blankfein started out as a gold salesman—so this is a bold statement from Goldman. Meanwhile, Morgan Stanley made a strong statement of its own last week, when it agreed to acquire Solium Capital for $900 million, a massive 43% premium over market value. It was the bank's biggest deal since acquiring Smith Barney in the aftermath of the financial crisis, and for most observers, the big question was: Who the heck is Solium? Turns out, the firm is an administrator of employee stock plans. Scintillating sector? Not so much. But lucrative and growing? Undoubtedly. Canada-based Solium counts 3,000 companies as clients, including leading tech upstarts such as Dropbox, Instacart and WeWork. These firms have a lot of young employees who just might one day be Silicon Valley millionaires looking for guidance from financial advisers to help them manage their complicated lives. As fate would have it, Morgan Stanley just happens to have more than 15,000 "wealth-management representatives" on its payroll. As the bank's CEO, James Gorman, put it, the acquisition of Solium provides his firm with "a greater opportunity to establish and develop relationships with a younger demographic and service this population early in their wealth-accumulation years." In case anyone still wasn't getting the message, the firm described its stable of financial advisers as the "core of Morgan Stanley's strategy" in its press release announcing the merger. It took the firm a long time to get here. Gorman, a former Merrill Lynch honcho, made wealth management his top priority when he became CEO about a decade ago. Last year Morgan Stanley's wealth- and investment-management divisions combined to generate as much revenue as its vaunted investment-banking division. And in the past five years, its stock has returned 40%, more than double that of Goldman. Once upon a time, Wall Street was a world ruled by traders, alpha males who made huge sums brokering deals for stocks, commodities or bonds. "If he could make millions of dollars come out of those phones," Michael Lewis wrote of the prevailing mindset in his seminal Wall Street memoir, Liar's Poker, "he became that most revered of all species: a Big Swinging Dick." Today wealth-management professionals and employee stock administrators are ascending. That could well be progress, but it's definitely a change.
hedge Sachs and Morgan Stanley have both taken bold realignment measures in an effort to prioritise commodity markets . Goldman Sachs , historically Wall Street 's largest commodities trader , will significantly reduce its number of commodities traders due to concerns that the margins on trading stocks are unlikely to recover to previous levels . Morgan Stanley , meanwhile , has acquired the employee stock plan administrator Solium for $ 500 m , 43 % over its market value , to enable it to enter the lucrative and rapidly growing sector .