Morgan Stanley eyes retirement, overseas wealth management opportunities

'I think in the wealth and asset management spaces internationally, we punch below our weight,' Chairman and CEO James Gorman said during the firm's conference call to discuss first-quarter earnings.

Fresh off its acquisition this winter of $75 billion in retirement assets with its purchase of Cook Street Consulting, Morgan Stanley will continue to focus on its retirement platform and also widen its gaze to the overseas wealth management market, which historically has proven elusive ground for U.S.-based firms.

While it’s still focusing on wealth management, trading and investment banking, Morgan Stanley has opportunities to pursue, James Gorman, chairman and CEO, said Thursday in a conference call to investors and analysts to discuss first-quarter earnings. And the firm has deal-making savvy, with two recent mega-deals for ETrade and Eaton Vance under its belt.

There will be “a lot of investment around the retirement workplace platform, which I think is sort of the next frontier,” Gorman said. “And we are just in baby steps, we are very early days of that, but I think that’s a huge opportunity.”

“I do think that there are opportunities outside of the U.S.,” he said. “But I think in the wealth and asset management spaces internationally, we punch below our weight. I think there’s clearly more we can do internationally, so sort of watch that space.”

The overseas wealth management business is a difficult nut to crack for U.S. firms, given the many regulatory and economic hurdles they face in such endeavors. For example, Wells Fargo Advisors recently said its advisers would no longer be able to work with clients abroad.

Meanwhile, Morgan Stanley dropped its banking license in Russia in 2020, and Gorman said that it has “significantly scaled back” its operations there.

Cook Street is the second retirement planning firm that Morgan Stanley has acquired recently; in September, the company closed its acquisition of Hyas Group, an institutional consulting firm with $43 billion in fee-based assets that manages retirement money for smaller businesses.

For the first quarter, Morgan Stanley’s wealth management group reported net new assets, including the Cook Street acquisition, of $142 billion, an increase of 12% from the last three months of 2021 and up 35% from the same time last year.

Net revenues for the first quarter totaled $5.94 billion, flat when compared to 12 months ago.

Morgan Stanley has about 16,000 financial advisers under its roof but it recently stopped reporting a specific head count of advisers in its financial statements.