Financial Results

Morgan Stanley's Wealth Arm Says Net New Client Assets, Revenues Rise

Editorial Staff July 19, 2023

Morgan Stanley's Wealth Arm Says Net New Client Assets, Revenues Rise

As second-quarter reporting season continues, the group reported a broadly positive set of numbers in its wealth management business. Margins were affected by higher compensation costs and other factors.

Morgan Stanley announced yesterday that its wealth management arm brought in net new client assets of $90 billion and record net revenues of $6.7 billion in the second quarter of 2023, against $52.9 billion and $5.7 billion, respectively. The gains were due to higher net interest income and the positive impact of deferred compensation plans. 

The pre-tax margin was 25.2 per cent, reflecting higher compensation expenses driven by severance costs associated with an employee action, integration-related expenses and higher provisions for credit losses, the US firm said in a statement. 

Wealth management transactional revenues fell 2 per cent on a year earlier, excluding the impact of the mark-to-market gains on investments linked to certain employee DCPs versus losses in the same quarter a year ago. 

Within investment management, total assets under management stood at $1.41 trillion at the end of Q2, up from $1.351 trillion a year before. Provision for credit losses to $64 million in Q2 2023 was up from $19 million a year before. Total costs rose to $4.915 billion in Q2 2023 from $4.196 billion.

Across the whole of Morgan Stanley, it reported net revenues of $13.5 billion in the quarter, up from $13.1 billion a year before. Net income applicable to the bank was $2.2 billion, down from $2.5 billion.

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