NEW YORK, NY January 14, 2009 —Citigroup and Morgan Stanley have agreed to combine their brokerages. Morgan Stanley is paying Citigroup $2.7 billion for a 51 percent stake in the joint venture. New York University Stern Professor Larry White says it's a deal that shows how much Citigroup wants to slim down and build up cash.

WHITE: This is one of the things that Citi has to do -- buying itself time, disposing of assets, trying to strengthen itself.

REPORTER: Citigroup's retail brokerage, Smith Barney, was once the crown jewel in its wealth management business. The new unit, to be called Morgan Stanley Smith Barney, will have more than 20,000 advisors, $1.7 trillion in client assets, and serve nearly 7 million households around the world.