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Morgan Stanley

Morgan Stanley Wealth Management Reports Record Profits

Morgan Stanley’s wealth management division had a record quarter for pre-tax profits, although advisor headcount declined slightly.

Morgan Stanley said its wealth management division posted record pre-tax profits of nearly $1.2 billion in the first quarter, up 19 percent from $973 million a year ago. Net revenues for the unit were $4.4 billion, up 8 percent from $4.1 billion a year ago.

Total headcount was 15,682, down 1 percent from the year-ago quarter and down about 30 advisors from the fourth quarter 2017, the firm announced in its first quarter earnings.

On average, advisors produced annualized revenue of $1.1 million during the first quarter, up 8 percent from a year ago and about flat on sequentially.

The unit had a pre-tax profit margin of 26.5 percent, up from 24 percent a year ago, which is within the firm’s expectation of 26 to 28 percent for this year.

In October, the firm announced its exit from the industry agreement known as the Protocol for Broker Recruiting. Firms that are not part of the protocol tend to be more aggressive litigators and arbitrators—which makes it harder for advisors to leave and take clients with them. UBS and Citi followed suit.

Total client assets were up 8 percent year-over-year to $2.4 trillion, but flat on a sequential basis. 

Overall, the firm’s first quarter earnings per share of $1.45, up 45 percent year-over-year, beat analysts’ expectations by $0.20, according to Net revenues were 11.1 billion, up 13.8 percent year-over-year, beating analysts’ expectations by $720 million.

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