In the wake of the global financial crisis of 2008, Morgan Stanley executives shook up the firm.
A long-time commitment to services that made lots of money in good years but too little in the lean ones was replaced by a focus on businesses that generate strong annual income streams, and to lock in customers for life – notably wealth and investment management.
It was tough going at first, but the model is working nicely now. In the full year 2022, the Wall Street firm’s wealth-management business generated $6.6 billion in pre-tax profit. Investment-management fees and net interest income accounted for 54% of total revenues, against 40% five years ago.
Morgan Stanley attracted a record $311 billion in net new assets in 2022 – another record – boosting overall client assets to more than $4.2 trillion.
It is working toward a long-term aim of hoovering up $1 trillion in wealth-related net new assets every three years and is on track to meet its target.
Turnarounds