Morgan Stanley · NYSE:MS
Morgan Stanley — BAC Conference 2024
23 slides from Morgan Stanley's conference presentation, Feb 22, 2024
Slide 1: Achieving 30% Margins Through Growth
Achieving 30% Margins Through Growth Jed Finn Head of Wealth Management February 22, 2024
Slide 2: Notice
Notice This presentation by Morgan Stanley is copyrighted and proprietary, and all rights are reserved. Any recording, rebroadcast or other use of this presentation, in whole or in part, without the prior written consent of Morgan Stanley is strictly prohibited. The presentation has been prepared so
Slide 3: Morgan Stanley Wealth Management is Unique in the Industry
Morgan Stanley Wealth Management is Unique in the Industry (1) ✓ At Scale Partial - Limited Workplace Offering Advice Offerings Institutional Non-Qual Digital Direct Securities Cap Table Equity Plan Alternatives & Retirement Deferred HNW Advice Family Office Connectivity Mgmt Admin Private Mkts Comp
Slide 4: We Have Steadily Transformed the Business Over Time
We Have Steadily Transformed the Business Over Time 1 2 3 4 Paired Advice Expanded and Accelerating Built Scale With Technology Integrated Our Channels Path to Advice Self-Directed Modern Wealth Workplace Platform Advisor-Led WM Client Assets ($Tn) (1) $2.0Tn $2.7Tn $5.1Tn $10Tn+ 2010 - 2015 2016 -
Slide 5: Two Key Focus Areas
Two Key Focus Areas 1 Path to Advice 1A 1B 1C Add Client Grow Net Migrate to Fee- Relationships New Assets Based Accounts 30% Pre-Tax Margins (1) 2 Scaled & Differentiated Platform Examples of Capabilities • Alternatives • Checking • Intellectual Capital • Investment Management • Private Markets • L
Slide 6: Path to Advice: We Have Seen Significant Growth at Each Step
1 Path to Advice: We Have Seen Significant Growth at Each Step Add Grow Migrate to Increase Asset Client Relationships Net New Assets Fee-Based Accounts Management Revenues Core Client Relationships (MM) (1) Net New Assets ($Bn) (2) Fee-Based Flows ($Bn) (3) Asset Management Revenues ($Bn) (4) 282 1
Slide 7: 1A We Have Multiple Sources for Adding Client Relationships
1A We Have Multiple Sources for Adding Client Relationships Growing Client Relationships Drivers of Client Relationship Growth Client Relationships (MM) (1) • Same Store Advisors 18.2 17.6 • Net Recruiting 14.8 13.0 • New Stock Plan Wins • Expanded Equity Award Populations • New Retirement Wins • No
Slide 8: 1B We Have Delivered Strong Growth
1B We Have Delivered Strong Growth Rolling Three-Year Net New Assets (1) ($Bn) >1Tn 981 768 419 278 247 2016 - 2018 2017 - 2019 2018 - 2020 2019 - 2021 2020 - 2022 2021 - 2023 The End Notes are an integral part of this Presentation. See slides 18-22 at the back of this presentation for information r
Slide 9: 1B In 2023, We Continued to Take Share
1B In 2023, We Continued to Take Share 2023 NNA as a % of Assets (1) 1H’23 2H’23 Full-Service Full-Service Full-Service Self-Directed Asset Mgmt Peer 1 Peer 2 Peer 3 Peer 1 Peer 1 9.5% 6.3% 4.4% 3.4% 2.9% ~3% ~2% ~2% 2.1% ~1% ~1% ~3% Full Year 2023 6.7% ~2% ~2% ~(1)% 4.8% 3.4% The End Notes are an i
Slide 10: 1B We Are At Cyclical Lows Suggesting Upside Ahead
1B We Are At Cyclical Lows Suggesting Upside Ahead Muted Capital Markets Cash On the Sidelines Higher Loan Paydowns IPO Volumes ($Bn) (1) % of Advisor-led Assets in Cash and Cash SBL Paydowns as % of Beginning Period Equivalents (2) Balances (3) 120 22% 30% 18% 24% 14 2020-2021 Avg. 2022-2023 Avg. T
Slide 11: 1C The Opportunity to Drive Fee-Based Flows from Brokerage Assets
1C The Opportunity to Drive Fee-Based Flows from Brokerage Assets Already at MS is Significant Example Initiatives to Drive Existing Opportunity within MSWM Fee-Based Flows WM Client Assets Across Brokerage, Self-Directed and Workplace ($Tn) (1) 3.1 Fixed Income 1.4 Alternatives in Advisory 2019 202
Slide 12: Scaled and Differentiated Platform to Deepen Relationships
2 Scaled and Differentiated Platform to Deepen Relationships Scaled Capabilities Priorities “Funnel” Infrastructure The Integrated Firm Alternatives and Private Markets Banking & Lending Partnership with Artificial Intelligence Investment Management Details to Follow The End Notes are an integral pa
Slide 13: The Integrated Firm
2 The Integrated Firm Integrated Coverage Model Areas of Focus Corporates Advising Premier Corporate Footprint: Strategy to Workplace Solutions Asset Serving Self-Directed to Ultra High Net Individuals Managers Worth with Institutional Capabilities Asset Delivering Integrated Client Value Across Own
Slide 14: Driving Banking and Lending
2 Driving Banking and Lending Momentum to Further Current Checking Account Holders Expand Household Lending WM Loans ($Bn) (1) Household Penetration (2) ~12% ~16% 147 >3x Net New Assets (3) 80 ~1.4x Revenues (3) 2019 2023 The End Notes are an integral part of this Presentation. See slides 18-22 at t
Slide 15: Leading in Artificial Intelligence
2 Leading in Artificial Intelligence Current State Future State AI@MS Assistant Advisor Interaction Client Layer AI@MS Debrief Order Entry & Performance Execution Reporting CRM Advisor Resources AI@MS+ Next Best Action Risk Analytics The End Notes are an integral part of this Presentation. See slide
Slide 16: Achieving 30% Margins Through Growth
Achieving 30% Margins Through Growth Pre-Tax Margin ~25% 1 Supporting Path to Advice 2 Deepening Relationships with Scaled and Differentiated Platform Investing to Unlock Benefits of Scale Pre-Tax Margin Goal (1) 30% The End Notes are an integral part of this Presentation. See slides 18-22 at the ba
Slide 17: Q&A
Morgan Stanley Q&A 17
Slide 18: End Notes
End Notes The Firm’s financial presentations, earnings releases, earnings conference calls, and other communications may include certain metrics, including non-GAAP financial measures, which we believe to be useful to us, investors, analysts and other stakeholders by providing further transparency a
Slide 19: End Notes
End Notes These notes refer to the financial metrics and/or defined terms presented on Slide 3 1. Reflects availability of the noted offerings across Morgan Stanley’s Wealth Management (‘WM’) segment and the following peers: Bank of America Global Wealth and Investment Management, BlackRock, Charles
Slide 20: End Notes
End Notes These notes refer to the financial metrics and/or defined terms presented on Slide 6 1. Core Client Relationships represent Advisor-Led Households as of 4Q 2019 and Advisor-Led Households, Self-Directed Households, and Workplace Participants, excluding overlap, as of 4Q 2023: • Advisor-Led
Slide 21: End Notes
End Notes These notes refer to the financial metrics and/or defined terms presented on Slide 9 1. 2023 NNA as a % of Assets represents NNA divided by beginning client assets for each stated period in 2023 for WM and the following peers: Bank of America Global Wealth and Investment Management, BlackR
Slide 22: End Notes
End Notes These notes refer to the financial metrics and/or defined terms presented on Slide 14 1. WM Loans represent loans from WM on U.S. Bank subsidiaries. U.S. Bank refers to the Firm's U.S. Bank operating subsidiaries Morgan Stanley Bank, N.A. and Morgan Stanley Private Bank, National Associati
Slide 23: Achieving 30% Margins Through Growth
Achieving 30% Margins Through Growth Jed Finn Head of Wealth Management February 22, 2024