MS · Forward model · Wealth Management · Pick case
What has to happen in Wealth Management
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Wealth Management
Fees on advised assets, transactional revenue, and net interest on $436B of deposits and $195.7B of bank loans. $8,856M of net revenues in the basis quarter - 41.5% of the firm before eliminations - at a 30.45% pre-tax margin, the first time the segment has printed above the company's published 30% goal in two consecutive quarters. Total client assets reached $8,084B and, with Investment Management's $2,004B, crossed the $10 trillion mark the company set as a firmwide goal. The revenue mix is disclosed (asset management $5,261M, transactional $1,167M, net interest $2,254M, other $174M) but pre-tax income is published only for the segment as a whole, so the line is projected as sequential growth and is NOT split.
Latest: $12.94B (2031Q2E)
| Period | Value |
|---|---|
| 2023Q1 | $6.56B |
| 2023Q2 | $6.66B |
| 2023Q3 | $6.40B |
| 2023Q4 | $6.64B |
| 2024Q1 | $6.88B |
| 2024Q2 | $6.79B |
| 2024Q3 | $7.27B |
| 2024Q4 | $7.48B |
| 2025Q1 | $7.33B |
| 2025Q2 | $7.76B |
| 2025Q3 | $8.23B |
| 2025Q4 | $8.43B |
| 2026Q1 | $8.52B |
| 2026Q2 | $8.86B |
| 2026Q3E | $9.06B |
| 2026Q4E | $9.25B |
| 2027Q1E | $9.45B |
| 2027Q2E | $9.64B |
| 2027Q3E | $9.84B |
| 2027Q4E | $10.03B |
| 2028Q1E | $10.23B |
| 2028Q2E | $10.42B |
| 2028Q3E | $10.62B |
| 2028Q4E | $10.82B |
| 2029Q1E | $11.02B |
| 2029Q2E | $11.22B |
| 2029Q3E | $11.43B |
| 2029Q4E | $11.63B |
| 2030Q1E | $11.84B |
| 2030Q2E | $12.06B |
| 2030Q3E | $12.27B |
| 2030Q4E | $12.49B |
| 2031Q1E | $12.71B |
| 2031Q2E | $12.94B |
Assumptions & reasoning
- The 30.45% margin is PRE-TAX INCOME margin - $2,697M on $8,856M - net of $6,132M of segment non-interest expenses AND of the segment's own $27M provision. The release rounds the same figure to 30.5%.
- The 30.0% terminal margin is DISCLOSED, not assumed: 'WM Pre-Tax Margin 30%' is one of the four Firmwide Goals Morgan Stanley published on its own 4Q25 Strategic Update. The model holds the company's published goal rather than extrapolating the 30.45% basis print or the 29.68% last-six-quarter blend, so the glide closes a 45-basis-point gap and barely bites.
- WHY NOT A SUBSCRIPTION DRIVER, answered explicitly. The disclosure is the best in the firm and the derived fee rate is remarkably stable: asset management revenue over average fee-based client assets is 72.4bp annualised in the basis quarter ($5,261M / $2,907B), 73.3bp in 2026 Q1 and 73.1bp in 2025 Q2 - a nine-basis-point band over five quarters. That prices asset management. It does not price the segment: asset management is 59.41% of net revenues and the other 40.6% (transactional $1,167M, net interest $2,254M, other $174M) turns on client activity and the rate curve, which the company does not project.
- Splitting the fee business from the spread business would require a pre-tax margin for each, and Morgan Stanley publishes pre-tax income ONLY at segment level. Goldman's Asset & Wealth Management failed the same test at 73% fee coverage; Morgan Stanley's coverage is lower. The fee rate and net new assets are recorded as the evidence the growth rate is anchored on, not as the driver.
- ASEASONAL by the gate itself. Centred four-quarter factors are [0.9950, 0.9865, 1.0059, 1.0127], a 2.6-point band, and the worst window spread of 0.0488 is NEARLY DOUBLE the whole 0.0262 signal - 0.54:1. That is noise on a fee-and-spread annuity, so no factors are carried.
- ON THE RECORD FLOWS: $148.1B of net new assets is 2.0% of opening client assets in a single quarter and 150% above a year earlier, but the release says 'just over half represented inflows related to IPOs of certain clients in our Workplace channel.' Roughly $74B of it is a function of a hot issuance window rather than of advisor recruiting, which is why the opening growth rate is set below the trailing mean.