cbs.marketwatch.com
So long, Dean Witter
Commentary: Amid confidence crisis, a famous name dies
By David Callaway, CBS.MarketWatch.com
Last Update: 12:07 AM ET June 20, 2002
SAN FRANCISCO (CBS.MW) -- Amid the worst crisis of confidence to hit Wall Street since the Great Depression, a famous name from that that bygone era will be formally buried Thursday.
Dean Witter, a small San Francisco brokerage that grew into the nation's second largest securities company, will join the likes of EF Hutton and Shearson Loeb Rhoades in the dusty textbooks of Wall Street history, a victim of the securities industry's relentless urge to reinvent itself to attract new suckers, uh, customers.
Morgan Stanley Dean Witter (MWD: news, chart, profile), which was formed in the $10.2 billion merger in 1997 of Dean Witter and Morgan Stanley, will from now on be officially known as Morgan Stanley.
The change was announced in a terse press release designed to make it look like a natural progression; a branding exercise to clean up an awkward name combination. But attempts by Wall Street marketers to wipe away history only hurt the next generation of bankers and brokers, who without the memory of what came before them are doomed to repeat the mistakes of the past.
At a time when Wall Street desperately needs to regain the confidence of the small investor, this is not a good idea.
Dean Witter & Co. was founded in 1924 by a man named Dean Witter and a few members of his family. Its headquarters were at 45 Montgomery Street, the Wall Street of San Francisco. It was the first brokerage to open offices in all 50 states, and in 1972 became one of the first securities firms to sell shares to the public.
In 1981, Dean Witter became one of the first firms to experiment with the now-scoffed-at idea of the financial supermarket, allowing itself to be bought by Sears Roebuck & Co. (S: news, chart, profile). Shortly afterward, Dean Witter brokers began appearing in Sears' stores, hawking stocks and bonds alongside wheelbarrows and power drills (and we thought pet products on the Internet were silly).
Along the way, the company tried several advertising campaigns to project its image as a caring, conservative institution, the most famous being "At Dean Witter, we measure success one investor at a time." That's no where near as exciting as the "let's put lipstick on this pig" line from the new Charles Schwab (SCH: news, chart, profile) campaign, but the message was clear.
Dean Witter had its share of bad apples. As a reporter in Boston in the late 1980s I covered several stories about brokers at the company who churned customer accounts, or went missing with clients' money. But it never suffered the humiliation of some of its rivals, such as E.F. Hutton, which imploded in a check-kiting scandal, or Drexel Burnham Lambert, killed in a wave of insider-trading charges.
Sears ended up spinning Dean Witter off in 1993, and it grew rapidly during the bull market before merging with Morgan Stanley to form the No. 2 securities firm, behind Merrill Lynch (MER: news, chart, profile).
But now the name is gone, and soon the history of Dean Witter will fade from the collective memories of bankers, brokers and investors, most likely replaced with renewed focus on the prospects for the E-Trades and Ameritrades of this world.
With the analyst and IPO scandals still weighing heavy on Wall Street's reputation, the concept of a broker who measures success by his ability to help each investor is as foreign to the public as the idea that the stock market might be ready to rally again.
With each link from the past removed, the public is left with a narrower and narrower vision of what Wall Street represents to the country; what its history has meant to our success and prosperity over the generations.
What we are left with is a misguided image of the broker as a huckster, conman, or crook. That's a shame, since the vast majority are, and always have been, hardworking and honest.
As our political and business leaders struggle with whether to enact the most sweeping regulatory changes to the industry since the post-Depression era, any reduction in historical context right now will be harmful. Morgan Stanley should have known better.
They say the more things change the more they stay the same. On Wall Street right now, that is a bad thing. |
