Morgan Stanley Wealth Mgmt Client Assets Up 62% YoY

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Morgan Stanley’s wealth management business saw modest gains in client assets, accompanied by a drop in revenue and income, although the firm did far better when considering the results year-over-year.

The division reached $4.63 trillion in total client assets in the third quarter, up 2% from the prior quarter but a full 62% higher year-over-year, according to Morgan Stanley’s third-quarter earnings report.

The growth was in no small part due to the $134.2 billion in net new asset during the latest quarter, which was 89% more than Morgan Stanley added in the prior quarter and 160% more than it did in the third quarter of 2020, the company says.

“Year-to-date, our successful integrations of E*Trade and Eaton Vance have supported growth of $400 billion in net new client assets across Wealth and Investment Management,” Morgan Stanley chairman and chief executive officer James Gorman said in the report.

Advisor-led client assets reached $3.65 trillion by the end of the third quarter, up from $3.55 trillion at the end of the second quarter but 32% above Sept 30, 2020, according to the report.

Fee-based client assets stood at $1.75 trillion at the end of September, which was 3% higher than at the end of June and 31% higher year-over-year, Morgan Stanley says.

Fee-based asset flows reached $70.6 billion during the third quarter, which was almost double the flows during the prior quarter and almost three times the flows during the third quarter of 2020, according to the report.

Morgan Stanley did not disclose the number of wealth management representatives for the third quarter in a row.

The firm had 15,950 at the end of 2020, the last quarter for which Morgan Stanley reported the numbers. That figure was 3% higher than at the end of 2019, as reported. Net revenue from wealth management in the third quarter was $5.9 billion, which was 3% lower than in the prior quarter but 28% higher year-over-year, Morgan Stanley says.

Non-interest expenses in the unit slipped 1% from the prior quarter to $4.4 billion in the third quarter, but that was 25% higher year-over-year, according to the report.

Net income applicable to Morgan Stanley in the third quarter of 2021 inched down to $1.16 billion, which was 8% lower than in the prior quarter but 37% higher than in the third quarter of 2020, the company says.

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