Morgan Stanley Tops $10 Trillion in Client Assets

Morgan Stanley reported on July 15 that its combined wealth and investment management assets exceeded $10 trillion in the second quarter. The company announced the milestone as part of its quarterly earnings report.

The wealth management unit posted a record $148 billion in net new assets and generated $8.9 billion in revenue for the quarter. Net new assets rose 25% from the first quarter and 150% from a year earlier. Fee-based flows for the business totaled $39 billion for the period. Client assets in the wealth management division reached $8 trillion, which pushed the firm’s combined wealth and investment management total past $10 trillion.

Executives pointed to client acquisition and workplace services as primary contributors to the inflows. Stock-plan IPO flows accounted for just over half of the quarter’s net new assets, reflecting activity tied to employee stock compensation programs administered through Morgan Stanley at Work.

CFO Sharon Yeshaya, on the earnings call, said: “The execution of our strategy, particularly our sustained investments in our client acquisition funnel, allowed us to reach more clients and deepen existing relationships.” She added that the firm has relationships with about 70% of the top 100 unicorns by market capitalization, giving early access to companies that may generate IPO-related inflows.

Morgan Stanley acquires clients through E-Trade and Morgan Stanley at Work and then aims to convert them into broader wealth relationships handled by financial advisors. Yeshaya noted the firm focuses on servicing private companies at early stages to build that top-of-funnel pipeline.

The company’s total revenue for the quarter was $21.3 billion, up from $16.8 billion a year earlier. Net income rose 58% to $5.58 billion. CEO Ted Pick said the results reflected active markets and years of investment, and added: “Our advice-based businesses are working well together across our leading global investment bank and scaled wealth and asset management franchises to deliver industry-leading growth.”

Management said its current priority is retaining new clients and deepening relationships through advice and expanded services. Pick outlined a target to grow stand-alone wealth assets from the current $8 trillion to $10 trillion over time.