Wealth management shines at Morgan Stanley

The firm posted record net revenue in wealth management last year, in contrast to investment banking, where it saw a 49% decline in revenue during the fourth quarter.

Morgan Stanley continues to be buoyed by its giant wealth management business, reporting Tuesday that it saw record net revenue of $24.4 billion in wealth management last year, a year-over-year increase of slightly under 1%.

That new high in wealth management occurred as Morgan Stanley, along with the rest of the wealth management industry, struggled through a tough year for stocks, with the S&P 500 stock index down 19.4% last year. The company also reported wealth management pretax profit of $6.6 billion in 2022, up 7% from 2021.

“Wealth management provided stability with record revenues and over $310 billion in net new assets,” chairman and CEO James Gorman said in a statement.

Morgan Stanley noted that its workplace channel for employees was continuing to drive the acquisition of clients and assets, with the company reaching goals of rolling out companion accounts to 90% of participants and achieving 30% retention of stock plan assets. The workplace channel has driven the majority of Morgan Stanley’s growth in client relationships, the company said.

Wealth management reported record net revenues for the fourth quarter of $6.6 billion, compared with $6.3 billion a year earlier, with net interest income increasing in 2022 compared to a year earlier as a result of higher interest rates and bank lending growth, according to Morgan Stanley.

The wealth management group’s returns were a contrast to Morgan Stanley’s investment banking franchise, which reported 49% decline in revenue in the fourth quarter, to $1.25 billion.

“Equity underwriting revenues decreased significantly from a year ago across products, reflecting the substantial decline in global equity underwriting volumes,” the company reported.

[More: Morgan Stanley operating chief Jon Pruzan exiting firm]