The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Jason Goldberg - Barclays - Analyst
: One of the things that we do preparing for this conference each summer as we take the summer, as we kind of reread each annual
letter from the CEOs. I think I counted 12x and Ted used a term integrated firm, maybe kind of expand upon more what that is, what
makes it unique or differentiated and kind of hear us kind of talk about something similar. So maybe what makes successful Morgan
Stanley.
Question: Jason Goldberg - Barclays - Analyst
: Got it. I'll maybe put up the first ARS question. Don't worry, again, I can ask you respond to this for all the companies. But sort of big
picture, a lot going on in markets, rate moves, geopolitical, U.S. elections.
You're obviously out talking to clients on the corporate and investing side all day long. Before we dig in, perhaps you could tell us
what they're thinking and feeling at the moment?
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SEPTEMBER 10, 2024 / 3:15PM, MS.N - Morgan Stanley at Barclays Global Financial Services Conference
Question: Jason Goldberg - Barclays - Analyst
: Against that backdrop, maybe we can kind of run through each of the main businesses, talking about maybe key drivers and how
things are playing out and the impact of the current backdrop. I'll start with Institutional Securities Group, given that's your current
focus. Maybe begin with investment banking specifically, when April Sharon talked about the backlog continued to improve with
an adviser underwriting pipeline, healthy across regions and sectors, and that we're in the kind of the early innings of an investment
banking rebound. I understand a lot of transpired then, as you just talked about. Maybe just talk to kind of current pipelines and
thoughts on realization of those pipelines?
Question: Jason Goldberg - Barclays - Analyst
: Okay, got it. I have to have you back next year to follow up on that. All right. And maybe shifting gears to markets, $3 billion in
Equities, $2 billion in FICC in the second quarter. you saw strength across the businesses and regions with client activity, fairly active.
Maybe discuss the current backdrop and kind of what you're doing to sustain momentum, where in Morgan Stanley grow share,
whether it's pockets clients, geographies, regions.
Question: Jason Goldberg - Barclays - Analyst
: That's an interesting perspective. As Co-President, you obviously work closely with Andy Saperstein on Wealth Management and
your former business investment management, client assets now over $7 trillion, which is obviously a big number. You're a leader
in wealth management. Maybe just talk to kind of what trends you're seeing in the wealth management business. Net new assets
have been a bit lumpy, client engagement may be a little bit soft.
And just how that's evolving? And just how does that inform your kind of 30% pretax margin up from kind of 27%, 28% in the second
quarter.
Question: Jason Goldberg - Barclays - Analyst
: Very helpful. I guess within Wealth Management, one area, I still get a lot of questions on is net interest income and sweep deposits.
Maybe just kind of give us a related perspective on sweeps and Wealth Management NII.
Question: Jason Goldberg - Barclays - Analyst
: And then maybe rounding out the business line discussion, investment management, your past love, here you've highlighted areas
of secular growth, customization, direct indexing, private alternatives, married with the global distribution platform. Where are you
in fully capturing Eaton Vance revenue synergy opportunities and what did you see the biggest growth opportunities in the medium
term?
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SEPTEMBER 10, 2024 / 3:15PM, MS.N - Morgan Stanley at Barclays Global Financial Services Conference
Question: Jason Goldberg - Barclays - Analyst
: Got it. And maybe up to the next ARS question. But maybe just talk to expenses for a moment, year-to-date efficiency ratio of 72%
and get targeted at or below 70%, 30% pretax margin kind of gets you halfway there in wealth management. Kind of what else needs
to be done and kind of what the investments are needed?
Question: Jason Goldberg - Barclays - Analyst
: Got it. Next ARS question. So I'm not going to ask you to comment on what Barr set because he said at it as we were on stage. But I
think...
Question: Jason Goldberg - Barclays - Analyst
: Conceptually, it seems like market risk, operational risk, things that impact Morgan Stanley are going to get curtailed. So just against
that backdrop, maybe just generally how you're thinking about capital allocation?
Question: Jason Goldberg - Barclays - Analyst
: And then in our 30 seconds remaining you referenced Eaton Vance multiple times. Each rate obviously has been additive. So clearly,
Morgan Stanley has benefited from inorganic growth. We're now a few years are moved from those acquisitions. Are there other
areas you think could be beneficial?
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SEPTEMBER 10, 2024 / 3:15PM, MS.N - Morgan Stanley at Barclays Global Financial Services Conference
Question: Jason Goldberg - Barclays - Analyst
: Great. With that, please join me in thanking Dan for his time today.
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