Morgan Stanley's net revenues and pre-tax income numbers came in stronger for the first quarter.

The wealth management arm of Morgan Stanley has reported first-quarter 2018 net revenues of $4.374 billion, a gain from $4.058 billion a year ago, while pre-tax income rose to $1.16 billion from $973 billion.

This part of the US-headquartered group reported fee-based asset flows of $18.2 billion in Q1. 

Net interest income of $1.1 billion increased from $994 million a year ago driven by higher interest rates and growth in bank lending. Wealth management client liabilities were $80 billion at quarter end compared with $74 billion in the prior year quarter.

The figures chime with other, broadly stronger sets of numbers from peers such as JP Morgan, Citigroup, Bank of America and Wells Fargo, which have already reported results in recent days.

Compensation costs, at $2.5 billion in Q1, rose from $2.3 billion a year ago on higher revenues. Non-compensation expenses of $764 million were essentially unchanged from a year ago. 
Total client assets were $2.4 trillion and client assets in fee-based accounts were $1.1 trillion at the end of the quarter. 

A total of 15,682 wealth management representatives at Morgan Stanley produced average annualized revenue per representative of $1.1 million in the current quarter.

Across the entire group, Morgan Stanley said net revenues stood at $11.1 billion for the first quarter ended March 31, 2018, rising from $9.7 billion a year ago. Compensation costs of $4.9 billion rose from $4.5 billion a year ago on higher revenues. Non-compensation expenses stood at $2.7 billion, rising from $2.5 billion a year ago. The cost/efficiency ratio of the bank stood at 69 per cent.

At the start of March, the NYC-listed firm was said to be forming a 66-strong team to assist financial advisors who work with some of the bank’s wealthiest clients. Morgan Stanley Family Office Resources is to be led by David Bokman and Daniel DiBiasio, media reported at the time.

The firm continues to see a number of arrivals and departures. A former wealth management chief at the firm, Greg Fleming, late last year went to Rockefeller & Co to head up its enlarged and rebranded business (see here). On the other hand, in March Morgan Stanley said it was opening a new wealth management branch in Gilbert, Arizona in July, it announced yesterday, creating 250 new jobs over the next few years.

Morgan Stanley, along with UBS and Citigroup, have pulled out of a pan-industry "protocol" to which it had been a signatory since 2004, under which firms agreed not to sue in the event of staff defections.