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: Betsy Graseck - Morgan Stanley - Analyst
: I did want to kick off with just a very basic question on how does it feel to be CEO of Morgan Stanley, a place you call your, quote-unquote, second
home in your shareholders letter.
Question: Betsy Graseck - Morgan Stanley - Analyst
: Okay, great. Well, we're going to get into that in a little bit. But beforehand, I do want -- I have another follow-up question related to the shareholders
letter when you said there has been a change in leadership, but no change in strategy. And I did want to ask, so investors can hear it in your own
words, how do you describe Morgan Stanley's strategy?
Question: Betsy Graseck - Morgan Stanley - Analyst
: Okay. This brings me to my last question about the shareholders letter, where you mention that you aim to do it even better. And this is in reference
to the integrated firm, which you are clearly extremely passionate about. Can you give us a sense as to what you mean when you say integrated
firm? How do you expect your managers to deliver on the integrated firm? And where do you see the biggest opportunities? What's the growth
path from delivering on this integrated firm?
Question: Betsy Graseck - Morgan Stanley - Analyst
: Well, I love the color. It's really great to be able to have a tangible example so that people can understand what you mean when you say workplace
and how does it work in an integrated firm. So thank you for that detail.
I'm going to shift gears a little bit and ask about how you're thinking about work --
Question: Betsy Graseck - Morgan Stanley - Analyst
: No, that's okay.
Question: Betsy Graseck - Morgan Stanley - Analyst
: We can always come back to it if we run out of questions.
Question: Betsy Graseck - Morgan Stanley - Analyst
: Okay. The question we have -- the question I have right now is just where do you see us -- where do you feel we are in the cycle? And are you as
bullish as you were on the last earnings call? Just taking it up a notch -- deep integration to high level, where are we?
Question: Betsy Graseck - Morgan Stanley - Analyst
: So what I'm hearing, tell me if this is the right takeaway, is that the opportunity set could be higher for longer.
Question: Betsy Graseck - Morgan Stanley - Analyst
: Excellent. Well, that was very clear and helpful in understanding how you're thinking about the forward look on the firm over the next several years.
Question: Betsy Graseck - Morgan Stanley - Analyst
: All right, there you go. So with that, I do want to just dig in a little bit to each of the business lines -- wealth management, investment management,
institutional securities. We talked a bit about wealth management already, but the pointed question here is around the growth drivers in wealth
management.
To hit that client asset goal that Morgan Stanley has, can you talk a little bit about what you see within wealth management or the key drivers? Is
there any white space to go after? Is it taking what is existing and hitting the growth like you've already just mentioned previously in workplace?
Question: Betsy Graseck - Morgan Stanley - Analyst
: And is there anything in lending that is interesting to you? I believe that the vast majority of lending in wealth is residential mortgage related. Is
there any interest in expanding beyond that?
Question: Betsy Graseck - Morgan Stanley - Analyst
: And how important is technology as a differentiator in gathering assets, retaining clients, improving efficiencies? In the wealth sleeve, is that
something that's --
Question: Betsy Graseck - Morgan Stanley - Analyst
: Great. Well, we have three more topics to hit in six minutes, so I'll see what I can do to work through it. We've talked a lot about wealth and quite
a bit about the opportunities in ISG. What about investment management? Can you talk us through the drivers of what you're looking for from
investment management division to hit that client asset goal as well?
Question: Betsy Graseck - Morgan Stanley - Analyst
: Great. I do want to ask about your thoughts on excess capital. Now, I realize that the Basel III endgame is not yet finalized, and so no one can put
an exact number on how much excess capital there is, so I'm not going to ask you how much you have. But I do want to know how you think about,
once all these rules are out and everybody knows what the number is for themselves, how do you think about utilizing it?
Question: Betsy Graseck - Morgan Stanley - Analyst
: Well, thank you so much, Ted, for all of that. I think it was a super reflection and helpful for everyone to understand how you think through all the
various issues and opportunities that Morgan Stanley has.
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