The division posted a pre-tax margin of 30.4 per cent and recorded $80 billion of fee-based flows. Across wealth and investment management, total client assets reached $10.5 trillion at the end of September.

The asset haul was well ahead of the second quarter, when the bank reported net new assets of $148 billion, just over half of which came from IPO-related inflows from clients in its workplace channel, the New York-listed group said in a statement. 

Asset management revenues hit a record on higher market levels and the cumulative effect of fee-based flows. Net interest income rose on lending growth and higher average sweep deposits. Transactional revenues also increased once prior-year mark-to-market gains on investments tied to deferred cash-based compensation plans are stripped out, as those gains are no longer presented in net revenues.

Compensation expense rose in line with higher compensable revenues. Non-compensation costs increased on technology spending and marketing and business development.

At group level, net revenues rose to $20.3 billion from $18.2 billion a year earlier. Net income was $4.9 billion, or $3.03 per diluted share, against $4.6 billion, or $2.80 per share. Return on tangible common equity was 22.6 per cent. Chairman and chief executive Ted Pick said institutional securities was led by equities. Investment management reported net revenues of $1.5 billion and long-term net flows of $15.8 billion. 

Shares in Morgan Stanley have risen by about 6 per cent this year.

Rivals also reported gains. At Goldman Sachs, asset and wealth management net revenues were $5.05 billion, 14 per cent higher than a year before, and wealth management client assets reached a record $2.1 trillion, with $47 billion of long-term net inflows. Bank of America’s global wealth and investment management arm reported client balances of $5.1 trillion, up 9 per cent, AuM flows of $20 billion and a pre-tax margin of 29 per cent, with asset management fees up 16 per cent to $4.5 billion. 

The results keep Morgan Stanley’s wealth margin above the 30 per cent level that management has described as a benchmark rather than a quarter-to-quarter target. Elevated market levels continue to lift fee-based revenues across the large US wealth platforms, making flow figures the clearer measure of competitive performance .