While Morgan Stanley suffered the same bond-trading slump that afflicted rivals, the firm’s wealth management business carried it to improved profit last quarter. That division — which Gorman made a central part of the bank’s future as a driving force behind the crisis-era acquisition of Citigroup’s Smith Barney brokerage – posted its third straight quarter of record pretax earnings.
Bloomberg News reports that the business of managing money always promised to insulate Morgan Stanley from swings in trading revenue tied to the whims of hedge-fund clients. That promise has been realized over the last six months, when volatility hit new lows and stock markets set record highs. As a result of Chief Executive Officer Gorman’s strategic moves, the firm earns the biggest share of revenue from wealth management of the six biggest U.S. lenders.
“Our third quarter results reflected the stability our wealth management, investment banking and investment management businesses bring when our sales and trading business faces a subdued environment,” Gorman said in a statement on Tuesday.
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