The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Wealth management: James Gorman outlines plans to put business back on track

“Given all that has happened I’m surprised it wasn’t negative $60 billion” James Gorman, Morgan Stanley In his first public presentation since joining Morgan Stanley in February as president and COO of the global wealth management business, James Gorman outlined how he intended to turn the dwindling arm into a competitive force in the industry.

While other global financial institutions have been revamping their private banking arms to adapt to emerging trends among high-net-worth clients, Morgan Stanley had so far appeared to have to given up altogether. Gorman, who joined from Merrill Lynch where he was president of the US and international private client business, is the first to admit that the business deserves a much-needed overhaul.

Speaking at the UBS Global Financial Services Conference in May, Gorman was his usual candid self. “Performance has been poor since 2001,” he said. “The business has underperformed the industry group and its potential. Margins have averaged just 6%, and pre-tax revenues dropped $96 million from 2003 to 2005. While competitors were extracting value at the bottom of the cycle, [Morgan Stanley] continued to lose pace.” And although assets under management did increase, this was entirely a result of market appreciation. Over the past 12 months, net new inflows into the business have been a negative $6 billion. “Given all that has happened I’m surprised it wasn’t negative $60 billion,” Gorman said.

What exactly did happen, he explains, is lack of investment, lack of controls, lack of segmentation, lack of product definition, high turnover in financial advisers and a damaged reputation.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree