Morgan Stanley surpassed $2 trillion in client assets in its Wealth Management business in July—a milestone both in the firm's growth and in the transformation of its business model.
"This is an important milestone, a testament to the trust that our clients place in us and a sizable store of ballast, giving great stability to our business model," said Chairman and CEO James Gorman.
Crossing the $2 trillion threshold is further proof that the firm’s strategy is working. On Nov. 30, 2008, during the financial crisis, client assets in the Wealth Management business were $546 billion. In 2009, after forming the firm's Morgan Stanley Smith Barney joint venture with Citigroup, which Morgan Stanley acquired in full last year, client assets were $1.56 trillion. The joint venture provided an expanded asset and deposit base, unique syndication and distribution capabilities as well as enhanced opportunities for clients.
"The $2 trillion creates a substantial base of assets upon which we can build by serving clients more completely and delivering more of Morgan Stanley's capabilities," said Gregory Fleming, Head of Morgan Stanley Wealth Management, adding, "It speaks to the scale of this world-class business, the skill of our Financial Advisors in developing relationships with client households, and the quality of our products and services."
Wealth Management also represents a major growth opportunity for the firm. As Gorman noted at last month's Morgan Stanley Financials Conference, the business is benefiting from its lending product suite, sophisticated tools for getting investment ideas out to the field and technology to boost productivity of Financial Advisors. Efforts to strengthen collaboration between the retail and institutional sides of the firm further serve to enhance client relationships.
Fleming also sees a further shift in client assets to fee-based accounts from those where clients pay per transaction. Advisory assets could make up as much as 40 percent of overall assets that the firm invests for clients in the future, rising to $1 trillion over time, he said last month at the Reuters Global Wealth Management Summit in New York.