Morgan Stanley at Bank of America Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ebrahim Poonawala - BofA Securities - Analyst : I'll do my best. The discussion may include forward-looking statements, which reflect Morgan Stanley management's current estimates and subject to risks and uncertainties that may cause results to differ materially. Morgan Stanley does not undertake to update the forward-looking statements -- this discussion, which is copyrighted by Morgan Stanley and may not be duplicated or reproduced without its consent, is not an offer to buy any security. With that, I feel very scared asking any questions now.

Question: Ebrahim Poonawala - BofA Securities - Analyst : So first of all, thank you so much again for being here. Maybe you've been around the firm a long time. I think you've been a key architect of the strategy. There was a lot of discussion when we went through this CEO succession process, how the firm is going to deal with it. We are one year into it. Things have generally evolved quite nicely from an investor standpoint. Give us a sense; one, it doesn't feel like there are big dramatic changes being made, but how you see -- how the last year has gone? And have there been actually any tactical changes as you and Ted and others have thought kind of instituted.

Question: Ebrahim Poonawala - BofA Securities - Analyst : I guess maybe talking about the other engine where there's been a lot of focus from -- is around NNA growth, net new assets, I think, as we come through, there have been a mixed environment the last few years. And I think the question that I get often is, can they actually -- I think the target is to grow about NNA 5% to 7%. Just talk to us in terms of the backdrop that you see today to grow that what could be the drivers that pushes it actually to the higher end over the next year or two.

Question: Ebrahim Poonawala - BofA Securities - Analyst : That's helpful. That's good color. I guess tied to that and tied to the funnel. I think Sharon mentioned an interesting stat on the 4Q call about $3 billion of inflows coming from the workplace channel. Just talk to us in terms of the optimization of that funnel, where -- like I talk to investors where, in my mind, Morgan Stanley is still in a nascent stage of all these integrations that have happened. So is that funnel fully optimized? Where do we stand today? And just the journey in terms of the path to advice, like how quickly can that happen?

Question: Ebrahim Poonawala - BofA Securities - Analyst : Got it. I guess, augmenting the growth that the advisers are bringing someone who sits at the institution. I do, I talk to (inaudible) all the time, and they -- it started begrudgingly, but I think they've come around to accepting and actually enjoying being part of a bank and being able to have this a wider breadth of products that they can kind of offer to their clients. It's interesting in terms of anything Morgan Stanley strategically growing the bank. Give us a sense of what's needed? I mean I'm sure there's a lot of like back-end technology to make this process seamless, where do things stand on that front? And should we think about it as primarily a tool to widen the relationship? Or could it actually be a client acquisition tool?

Question: Ebrahim Poonawala - BofA Securities - Analyst : And would you say as tied to the penetration, the willingness of the advisers to be on board with this -- is it -- has it been better as expected? Or does it take a little bit more of incentivizing to do? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 2:40PM, MS.N - Morgan Stanley at Bank of America Financial Services Conference

Question: Ebrahim Poonawala - BofA Securities - Analyst : Maybe just switching to in terms of the profitability of the business. I mean, I think the pretax margin is fast approaching the 30% target that you'll have. Just talk to us, to me, I think profitability matters, but the resiliency also matters. Just talk to us in terms of investments that are being made to make that sort of resilient once you get there? And what prevents you from getting there?

Question: Ebrahim Poonawala - BofA Securities - Analyst : That's interesting and I think, I debate this with investors a fair bit when we think about the competitive landscape as intense. And in my view, you've built something which is hard to replicate as a franchise in terms of all different pieces. Just talk to us about the competitive landscape, when you think about how intense it is, who do you see as your biggest competitors for the franchise?

Question: Ebrahim Poonawala - BofA Securities - Analyst : That's fair. I think talking about category of one differentiated business model. I think Parametric was a good addition when you did that. Just talk to us, if you don't mind, going back a little bit back in time, remind us the capabilities that brought to the firm, the differentiation it brought in areas where you're investing within that business today?

Question: Ebrahim Poonawala - BofA Securities - Analyst : Got it. I guess the other theme or at least it feels like when you talk to FAs and others in the industry, alternatives is a big focus and in terms of distribution of alternatives. Just talk to us how you're approaching it within both sort of the wealth and investment management business. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 2:40PM, MS.N - Morgan Stanley at Bank of America Financial Services Conference

Question: Ebrahim Poonawala - BofA Securities - Analyst : Got it. I guess going back, you referenced earlier the integrated firm. Just give us a sense of how that strategy has evolved. I mean, obviously, all these acquisitions, when you put together over the last 5 years, where you are in terms of integrating the firm and like bringing the whole bank, I guess, to the customer.

Question: Ebrahim Poonawala - BofA Securities - Analyst : Got it. I guess part of that journey from cradle to maturity was the eTrade platform and talk to us around how that platform has evolved as being part of this integrated firm as opposed to being stand-alone. And you often hear in terms of how some of the upstarts have been more appealing to younger generation in terms of how they buy and sell stocks. How do you think about E-Trade competing with some of these firms and how well positioned is it?

Question: Ebrahim Poonawala - BofA Securities - Analyst : Do you think the business is set up right now to attract the younger generation who are kind of early in the stage of wealth creation.

Question: Ebrahim Poonawala - BofA Securities - Analyst : I guess if I could follow up on one thematic topic, it's not here. Just around -- talk to us about your strategy in the United States versus international, be it across wealth management, each, how you look at that opportunity set?

Question: Ebrahim Poonawala - BofA Securities - Analyst : Got it. I guess a few minutes left, one last question. Just around as we think about the tech strategy, I mean, I think -- including just host panel before this discussion on the impact of AI in financials. I mean one, I think holistically talk to us around where the investments are going in tech? And how meaningful can AI be for the firm?

Question: Ebrahim Poonawala - BofA Securities - Analyst : With that, Andy, thank you so much for your time this morning.