Brooke’s note: There are two sides to every story. Morgan Stanley Smith Barney has certainly seen many of its brokers make the decision to break away to independence. From her perspective as a recruiter for the company Mindy Diamond sees brighter skies for the largest of the remaining wirehouses.

Recruiters disagree about the effect of the Morgan Stanley Smith Barney merger on the firm’s standing in the intra-Wall Street battles over advisory talent.

The merged firm is emerging as a stronger player, according to recruiter Mindy Diamond, who recruits on the firm’s behalf.

She said that after a quiet six months of recruiting, she expects the firm to show some big successes after Labor Day.

“Morgan Stanley has a supreme name; it’s a name that has swagger” helped by the fact that it’s owned by a bank holding company and not a bank – an important distinction, she says.

Agendas and cultures

Diamond didn’t discuss the differences between the two in detail but banks are known as companies with agendas and cultures that are product-driven and tend to rely on vast hierarchical structures. Bank holding companies are relatively empty legal vessels that are preferable to a bank for borrowing money, issuing stock and making share repurchases of its own stock, according to Wikipedia.

Banks, historically, have been loath to pay big bonuses because it goes against the grain of how it compensates loan officers.

With these cultural issues as a back drop brokers at other wirehouses — especially at Merrill Lynch and UBS — are giving Morgan Stanley Smith Barney a hard look, according to Diamond.

Danny Sarch, principal of White Plains N.Y.-based Leitner Sarch Consultants, says he isn’t seeing many signs that the new Morgan Stanley Smith Barney is capturing interest from other wirehouse brokers, especially those with less than $1 million in production.

Lowest common denominator

“I strongly disagree,” he says. “The rules are more restrictive than they are at the other wirehouses because they manage to the lowest common denominator. At UBS – and even Wells Fargo and Merrill Lynch — they’ve made a definite effort to give their brokers freedoms. At Morgan Stanley, every meeting is a new regulation; it’s an astounding thing.”

See: Why Smith Barney is now the most target-rich environment for recruiters of breakaways

Though Morgan Stanley Smith Barney may have been a quiet recruiter in the first half of 2010, there is a positive shift in the works, according to Diamond.

“The deals are the biggest on the street; they’re happy to recruit,” she says. “We’ve experienced a tremendous uptick in the last 60 days.”