January 21, 2010

Morgan Stanley Posts '09 Results; Revenue Up for 18,135 FAs

After Smith Barney merger, advisors have an average of $692,000 in trailing-12-months' sales and $86 million in client assets under management.

This news article originally appeared on ResearchMag.com on 1/20.

Morgan Stanley says its Global Wealth Management group - which includes the operations of Smith Barney -- delivered net revenues of $9.4 billion in 2009 with client assets of $1.6 trillion and 18,135 global representatives as of December 31, 2009.

The Morgan Stanley Smith Barney merger was completed on May 31, 2009.

"In a year of transition for our firm and the entire financial services industry, the employees of Morgan Stanley delivered substantially improved financial performance while also making significant progress on critical strategic initiatives that will drive our business in the years ahead," says CEO and President James Gorman.

Thus, whereas a year ago, Morgan Stanley had 8,356 financial advisors, it now has more than 18,100. The most recent total of 18,135 - however - is down a bit from the 18,160 that MSSB had as of September 30, 2009 and the 18,444 it had on June 30, 2009.

"During the year, we closed the Smith Barney transaction earlier than expected; continued the expansion of our strategic alliance with Mitsubishi UFJ; and forged a deal to sell Van Kampen and our retail asset management business to Invesco," explains Gorman.

Trailing-12-months' revenue per advisor is now $692,000 vs. $662,000 at the end of the third quarter in 2009 and $603,000 at the end of 2008, before the merger with Smith Barney.

Morgan Stanley says that 70 percent of client assets are held by clients with over $1 million being managed by the broker-dealer. Fee-based assets represent 24 percent of total assets.

Assets per advisor are now roughly $86 million, up from $84 million in September 2009 and $66 million in December 2008.

Net new assets stood at (negative) -$4.7 billion in December 2009 vs. -$8.8 billion in September 2009 and -$7.4 billion in December 2008.

For all of 2009, the Global Wealth Management Group had pre-tax income from continuing operations of $559 million, compared with a pre-tax income from continuing operations of $1,169 million last year. (Comparisons of current year results to prior periods were impacted by the results of MSSB, according to the company, and '08 results included pre-tax income of $688 million related to the sale of Morgan Stanley Wealth Management S.V., S.A.U.).

On the day it announced results, January 20, Morgan Stanley's stock declined as traders reacted to the fact that it missed earnings estimates on lower trading revenue.

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