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Morgan Stanley FAs Boost Sales in Q109

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Morgan Stanley has reported a net loss for the quarter ended March 31, 2009, of $177 million, compared with net income of $1.4 billion a year ago. Net revenues were $3.0 billion, 62 percent below last year’s first quarter. The company says that the global wealth-management group delivered solid results – with net revenues of $1.3 billion.

“In this volatile environment, we have focused on prudent stewardship of our balance sheet, capital and risk profiles, as evidenced by our exceptional capital ratios. We have also moved quickly to realize attractive new opportunities including the creation of a new industry leader in wealth management with the Morgan Stanley Smith Barney joint venture as well as our new securities joint venture with MUFG [of Japan],” explains John J. Mack, chairman and CEO.

Morgan Stanley’s global wealth-management group stands at 8,148 financial advisors, down about 1 percent from the number it had as of March 31, 2008, and lower than the 8,356 it had as of December 31, 2008 These reps now have annualized revenue of about $630,000, which is close to 20 percent drop for the previous year’s $772,000 but above the $603,000 of the quarter ended December 31, 2008.

Total client assets stand at about $525 billion, down some 25 percent from a year ago. Assets owned by clients with more than $1 million in assets represent 67 percent of total assets. And fee-based assets stand at roughly 24 percent of total assets.

Client assets per advisor are now $64 million on average, down from $85 million a year ago and $66 million in the quarter ended December 31, 2008.

In the latest quarter, Morgan Stanley advisors attracted $3 billion in net new assets in the United States vs. $8.4 billion in the same period of 2008.

But the unit has seen growth in its bank-deposit program, which stands at nearly $47 billion as of the first quarter of 2009 vs. $33 billion in the same period last year.

The unit’s pre-tax profit margin stood at 9 percent in the most recent quarter vs. 41 percent for the first quarter of 2008.

It posted pre-tax income of $119 million, compared with pre-tax income of $949 million in the first quarter of last year. The results for the prior year’s first quarter included pre-tax income of $708 million related to the sale of Morgan Stanley Wealth Management S.V., S.A.U.

The current quarter results include net expenses of $39 million related to organizational and integration costs for the Morgan Stanley Smith Barney joint venture.

Net revenues were $1.3 billion, down 20 percent from a year ago excluding the gain from the sale noted above, the company says. The decrease primarily reflects lower asset management and transactional revenues. Lower asset management revenues reflected a decline in client asset levels; lower transactional revenues primarily reflected reduced levels of market activity and a decline in underwriting revenues.