Morgan Stanley spent 16 years becoming boring on purpose.
In 2009 Morgan Stanley traded volatile trading revenue for fee-based wealth. Wealth and investment management went from about 26% of pre-tax profit in 2010 to an expected 57%. ROTCE was 18.8% in 2024.
Transcript
On January 13, 2009, fresh off a near-death autumn, Morgan Stanley signed away its identity as a trading house.
It could stay a trading house, with capital at risk. Or it could trade that volatile revenue for durable, fee-based revenue. It chose wealth.
First, Morgan Stanley combined its wealth group with Citi's Smith Barney: more than 20,000 advisors and $1.7 trillion in client assets. The venture closed June 1, 2009. In 2020 it bought E*TRADE, in an all-stock deal valued at about $13 billion.
Wealth and investment management made roughly 26% of Morgan Stanley's pre-tax profits in 2010. After E*TRADE, the expected share was about 57%.
By 2024, Morgan Stanley's fee-based client assets were $2.347 trillion, and its return on tangible common equity was 18.8%. It ran above 20% in the first half of 2025.
Not every goal is met. Morgan Stanley brought in $251 billion of net new assets in 2024, short of a $1 trillion every three years pace. Changing what a firm earns takes many years. Plan for that pace, and measure it.
The records behind this video
Every figure in the video comes from this Decision Record, each with its sources.
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