James P. Gorman Named President and Chief Operating Officer of Individual Investor Group at Morgan Stanley

Brings Unmatched Breadth and Depth of Experience; Record of Successfully Building Retail Financial Services Businesses

New York —

Morgan Stanley (NYSE:MWD) announced today that James P. Gorman has been named President and Chief Operating Officer of the Individual Investor Group (IIG) responsible for leading Morgan Stanley's global retail sales force. Mr. Gorman will be a member of Morgan Stanley's management committee and report to Acting President Zoe Cruz. Mr. Gorman will assume his new role effective February 2006; until that time, Ray Harris will continue to serve as Acting President and Chief Operating Officer of IIG.

Mr. Gorman, 47, joins Morgan Stanley from Merrill Lynch, where he successfully held a variety of positions with broad responsibility. In addition to retail brokerage, his experience includes leadership of insurance, mortgage, retirement, small business lending, and private banking businesses as well as credit cards and client call centers. Most recently, he has served as executive vice president and head of Corporate Acquisitions, Strategy and Research. Until June 2005, he was president of Merrill Lynch’s Global Private Client Group, managing the firm's 14,000 financial advisors. Under his leadership, Merrill Lynch’s Global Private Client Group more than doubled pre-tax profit, increased margins from 9% in 2001 to 19% in 2004, and led the industry in terms of revenue and profits per broker.

"Uniquely Qualified to Lead Transformation" of Retail Business

John J. Mack, Morgan Stanley's chairman and chief executive officer, said, "James Gorman's depth of experience and expertise are unmatched in the industry, making him uniquely qualified to lead the transformation of Morgan Stanley's retail brokerage business. We are excited about the great potential of Morgan Stanley's retail business and believe that James is the right leader at the right time to help us realize that potential. He has consistently delivered record operating results and built an organization that is a clear leader in the industry. I have every confidence that James will work very effectively with our valuable financial advisors to further enhance the delivery of services to their clients."

Ms. Cruz said, "We are extremely pleased to have James joining the Firm to lead IIG. He brings to the role great strategic insight and an outstanding track record of building highperforming retail businesses. The senior management of Morgan Stanley is strongly committed to our retail business and greatly values our high-quality financial advisors. We look forward to working with James to grow the business, enhance its profitability and ensure a culture of excellence across the organization. In the meantime, Ray Harris will continue providing strong leadership for IIG and pursuing the initiatives we already have undertaken to improve its performance and invest in developing top-quality financial advisors."

Background on Mr. Gorman

Mr. Gorman joined Merrill Lynch in 1999 as chief marketing officer. In 2000, he was named head of the firm's brokerage business. In 2001, he became President of the U.S. private client business and in 2002 was named President of the private client business worldwide. Before joining Merrill Lynch, Mr. Gorman served as a senior partner of McKinsey & Company, where he was a member of the financial services practice. Prior to joining McKinsey, Mr. Gorman was an attorney in Melbourne, Australia.

Mr. Gorman is a member of the board of directors of the Securities Industry Association and is that organization's chairman-elect for 2005. He also serves as a Trustee of Columbia Business School. A native of Australia, Mr. Gorman earned a Bachelor of Arts and a law degree from the University of Melbourne, and an M.B.A. from Columbia University.

About Morgan Stanley

Morgan Stanley is a global financial services firm and a market leader in securities, investment management and credit services. With more than 600 offices in 28 countries, Morgan Stanley connects people, ideas, and capital to help clients achieve their financial aspirations.