Morgan Stanley (MS) 16 Jan 202019 Q4 Earnings call transcript

Good morning. This is Sharon Yeshaya, Head of Investor Relations.

During today’s presentation, we’ll refer to our earnings release and financial supplement and strategic updates, copies of which are available at morganstanley.com. Today’s presentation may include forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to our notices regarding forward-looking statements and non-GAAP measures that appear in the earnings release and strategic updates. be reproduced not our may presentation duplicated without or consent. This

highlighted results strategic against significant transparent have and benefits. are were of adjustments EPS annual and to update have were our the for operating adjusted XX-K. performance for a discrete XXXX on intermittent provide XXXX of our tax form adjusted These presentation. report our strategic the which ROTCE several Within reconciliation reported and exclude to reported net included XXXX exclude Likewise, impact XXXX to been items The XXXX view metrics in intermittent to comparative non-GAAP notes objectives. of been our operating adjusted made in these the metrics the performance

call Chairman Officer to now I and the will Gorman. James turn Executive Chief over

Thank history. moment everyone. you, joining best of discuss let of John will was a a you of annual XXXX were the year presentation. with me details business first us. lines. from Results in strategic ranges within XXXX through for the Sharon. our representing target you contributions one update in morning, strong take but our our Thank Good each our

to turn Please three. slide

increments. about our think in five-year firm’s transformation I

our Over reset the strategy. the to our integrated firm, years financial worked crisis, the and clean we issues aggressively first five period, up stabilize the into from Smith franchise Barney

digitalization, technology, the next we’ve in and years business made talent five the around sheet. investments Over significant balance our

materially the capital tightly, We return. by grew doubled net we revenues increased income and while expenses XX% managed

intermittent XX% doubled discrete and benefits. Our EPS ROTCE is excluding nearly now than stands tax at more

of goal durable from evolution of to our next should level design, revenue institutional sources the support business disruption. investment continuation will further, help by this and The we discuss of of be market more base phase shift and The securities during our a of profitability within management. emphasizing periods wealth to Today, continues evolution.

we into we defended long this the securities throughout and expanded this on little institutional journey footprint which decade our show a deeper Drilling four. slide

and our to Our brand bank. presence closely tied institutional integrated leading investment is

franchise institutional from grow on shrinking continues revenues which competitive and advantage same the as to contribution allowed investment take premier a Our key grow wallet. management slide five. us remains At share time to wealth the the and despite has shown

Over three a the management have which increased the U.S. we while last five have revenues particular times profitability modern was that the $XX Of XXX% or years our years, to days our business wealth and investments of making nearly we equal on five of greater million platform. nearly in banks note, wealth still business than ago.

investment wealth combined management and we among approximately revenues untapped and invested also put on reflects the growth investment new wealth With strong performance. are $XX through offering. a in have new our focused clients, of in largest the world net We our and our and the management flows growth-oriented businesses opportunity now products. platform. We solutions billion We further long-term leadership term team platforms which workplace scale to our highlight management channel an in long together

ambitions cohesive growth for and future culture not team. strong a be a these Meeting would without possible

On our of slide and the described six, tenure our leadership we culture team.

various track X-year meeting an of stating public and goals. record have We

been to talent finance. and to culture top ensure in sustainable Morgan of the continue diversity employer our further for our and at of We meaningfully efforts has remain invest choice forefront we an Stanley

to a founded of over adoption sustainable finance markets. our the investing across mission with capital group decade global the We sustainable ago accelerate

platforms our benefits for segments providing more positioned most my spend with and growth. we franchise. our we and of future scale that detail about about time to have I a we are want across opportunities the bit excited see Across we're

slide institutional securities with X. start on Let's

share In five over the in businesses gains Our is years our footprint and sustainable. we've we've across strong. these to gained extremely the are reason of last believe wallet, institutional franchise phase institutional declining

and stability has the business the of a footprint. from benefited leadership to commitment global client Our

We expect the to continue to division. gain share hold and across

On chapter wealth XXXX at in deeper marks management. management slide a strategy. new wealth X, look our a we take

we make in digital investments of new position population acquisition through [indiscernible] the efficiently the Solium service to significant and The the space, capture and assets clients mass workplace. us the

our beyond works the we've plan Moreover, and corporate Morgan can we administration relationships Morgan Stanley by We've offering completed as corporate Stanley the look span to as we at leverage clients. just through built share institutional new add work stock platform. offering to

products services not offerings. of limited employees are We help This an retirement participants. this allows to touch deliver enhancing and larger wellness and fulsome to our are even will plan of financial stock ensure more to diversity suite points us that our in base

As this mandates. slide to Stanley The well is combination state-of-the-art in the share we're the being platform illustrated on new works win capabilities very the marketplace. Wealth continuing Morgan Management and received

of to end We the our of Stanley model the expect by Morgan to work convert clients fully existing XXXX. corporate all

XX% brokerage with legacy Shareworks management our nearly To-date Morgan individual services. to and be by employees introduction will financial clients corporate end system our gain wealth the to will and have year transitioned exclusive plans been by content those the offering Stanley accomplished XXXX end the of of educational access providing remainder ‘XX on our an to them coaching, self-directed and of

funds our and We'll relationships digital solutions. ultra for or clients be more segments X to a have expect Over to five and worth adviser than million provide high the we today. offering compelling convert X relationships servicing financial adding high more channels we digital net years the participants employee over virtual the able management all wealth either to with million advisory massive client our seven to to with next or advisors

our X, by that advisers embraced are going to with our supporting tools be have investments them product our to slide enabling competitive services been advisors consolidation. clients that believe deliver and of The we've advantage we cutting-edge and initiatives set and clear technology for we Moving forward. unique these anecdotally asset to digital will supporting been made

migrate flows medium over four seen last over assets assets our to advisory we've that of in course term. at billion of the over half and advisory the of will least years to believe continue client XXX Additionally,

talk our differentiated me and about XX. clients things products developed. lending opportunities we deliver the slide the to is is management can value one growth product very both fragmented by areas number illustrated of capture to opportunity sector believe large to for to investment we've this most we itself done on where Let's of new exciting The and innovation in we've management extremely asset

into These more relevant base, revenue and us across and client our products growth. have revenue spectrum broadened translated material, asset made the

XXXX. global be launched seen products of future already under new $XX we've XXXX almost strategies and new component client important of leveraging growth. in significant XXXX very million will launches more in $XXX from billion these We've contribution many Since a products revenue franchise. investments product incremental continued generating assets of a our broadly and These versus client incremental successfully management franchise

existing Another franchise. of is growth client key driver diverse our alternatives

is you If alternative is see on slide private and secular at our in scale growth alternatives. platform XX strong client there

funds. to organic new private alternative product noted growth private addition seeing page existing In launches high-performing strong our prior on in the we're

the of fund For larger example, number infrastructure than respectively. $X.X X institutional over $X.X is billion billion XX% our which raising fourth closed in quarter versus X capital infrastructure

real our growth strong very see organic core to continue we institutional premier in strategy. estate Further,

products our to contributors as will capabilities markets world-class be investment global alpha critical revenue solutions Our both across well growth. private management's and as public

performance strategies active traded we has managers. and organic robust public ranked XXXX equity since equity footprint client flows. number publicly among net in Our global the We active driven strong has X believe growth top

XX. let's turn to slide So

XXXX, all other and we've meet continued these strategic expansion. believe objectives. In with our that drive we expect We will initiatives we capital our growth expense to our sufficient. were that communicated capital we that discipline further deploy Since ROTCE along to time

for to the Stanley transition future capital able while and expect continuing new shareholders We to the to return forward to growth. look regime to will be excess capital Morgan invest

us to at invest Our robust position the to return and our XX% XX%. in in opportunities franchise ROTCE ability We're X-year deliver will capital expansion in to capital. to confident pursue enable

aspirational XXXX slide are objectives. as conclude to we targets our strategic in on shown with targets I'll achieve well XX. updated our as The longer-term expect

and this with is into what business meaningfully We've it intent transform today.

we result XX% market time. here a firm's that exceed will As consequence. XX% believe management We phase next assuming journey the and pre-tax margin on over should wealth to natural normal the XX% a be a execute of XXXX the environment will as in objectives listed business

from This compelling individuals serving worth Between competency has of and our core grow the workplace business benefits. into here. high scale and clearly our to ultra room net expansion there is new high

across wealth overall and firm capabilities the other we're investments platforms given scale and digitalization of numerous enhance our to making all of On management our technological efficiencies. our

to self-fund these able been largely have We investments.

term. long XX% XXXX in expect this to Between and in below revenue to XX% achieve ratio XX the and we efficiency growth an

and our rise result term XX% on a common XX% tangible to to a common XX% we to efforts return long return have As tangible the we other of the of XXXX XX%. on in these expect aspire to equity to equity and over all

established in I call quarter who to questions. objectives. and you. confident the into of take will our Jon together our track discuss ability each will then our Thank positioning we're all and annual turn competitive record of continues Given business, now results fourth to our our over would these invest achieve we now your to

revenues was fourth the billion momentum good billion XX%. and contributing EPS and full-year PBT year of had increasing and solid revenues quarter were in a and revenues ROTCE In resulting record through the XXXX. firm $X.X level quarter ROE firm $XX.X in X% you $XX.X strong $X.XX to produced Fourth-quarter of of morning. sequentially XX.X% was of Thank finished We ground. on The billion. an the

action net benefits the $XXX expenses other. largely In December intermittent each discrete of a offset related million employee $XXX fourth of tax severance to million quarter and

year and ROE full was For ROTCE the XX.X% XX.X%. was

fund services. and more related to absorbing technology Total billion were $XX.X and ability our investments discipline continued our Solium integrating and costs through increased business for year. expenses and flat controllable essentially development Non-compensation non-interest billion expenses to at XXXX incremental the self over $XX.X professional expenses demonstrating marketing were particularly to

and continue workforce in-house efficiency contingent centers. of our optimization actively reduced opportunities our including We global review through on dependence global to workers leveraging

also consolidation over firm We vendor for time. the across opportunities see

as This expenses a objectives on discussed. plans continued increased as full-year result deferred expenses help us focus X% revenues. and basis. movements will non-compensation rise control to the our severance in included well and Compensation significant James increased This compensation and that momentum charges just achieve

ratio efficiency expense full-year target. was below our XX.X% Our XX%

businesses. the to Now

fourth business XX years. revenues strength by billion marking over Our institutional banking advisory. especially securities investment in driven in were $X.X the of reported best Results quarter

the did we fourth sales trading see not Additionally, seasonal a of or quarter. and underwriting typical in slowdown

full level. the below record slightly year $XX.X ISG For last year's revenues billion were

reflecting rose with The million a impacts action plans. and December the the to of employee $XXX ratio related investments quarter compensation deferred to compensation severance for associated the in XX.X% of movements

the items XX% XX%. and after year ratio compensation considering these of under again fourth-quarter was compensation After was adjustments impact the considering full the these looking the at approximately ratio

in some creates as volatility said times has impact in limited DCP have very but this the a it past to we the ratio bottom line. many

had and seasonally decade advisory a The banking generating was driven fourth-quarter robust results sequential $X.X increase the strengthened Investment billion. strongest underwriting. revenues by in of for

products. remains target robust as pipelines M&A strong we Overall, to technology. across pace the and XXXX of of period and global in consumer the activity remains many of across healthcare, issuers are raises healthy pipeline extend. expect capital The first The half particularly would equity

from pipeline to said on dependent realize market As conversion condition. the we remains before

down the trading leadership declines billion in the X% sixth year. Fourth-quarter EMEA Asia. and our and sales equity In globally for were number offset our sequentially. by in and Strengths was revenues one Americas consecutive position retained $X.X we

continued equity and down our activity income and client with as weighed impact expand $X.X from markets regions of trading quarter. a third billion, robust revenues share Prime of as market offset partially on the which Fixed performed results. lower higher the sales derivative brokerage In across to quarter rose produced volumes. revenues sequentially cash declined during trending well we XX% global volatility

of We our well the our performance Healthy with continue Results solid supported strong with to driven diversified client were levels engagement client credit another deepen across performance. quarter relationships results. complex. by base. produced Micro

increased witnessed to continue secured which real and our businesses lending commercial We interest perform estate from client products. in invest well

lower this a on Commodities improved and Balance sequentially. client Macro remains in activity. prior the focus declined basis results sheet declined to from the also business year. versus third revenues due a velocity full-year quarter

environment a rates. results. However, XX%. and where basis full performance Strong of activity results the further mix in difficult decline revenue weighed diversification year outweighed supported the in was micro income in On and client up on macro a fixed geographical FX

by of higher pre-tax margin XX.X% point $XX to fourth had revenues offset $X.X Strong an XX resulting billion as basis of on impact severance quarter Management. a Turning We Wealth were seasonal which margin. quarter reported revenues $X.X in profit the and the of well for a expenses billion PBT as charge million

business margin was illustrate XXXX. this basis On expenses, to over a and last representing X% expansion Solium the the of point the a from investing XXX full-year in scale PBT absorbing XX.X% the The while continues declined non-compensation business year. basis expenses benefits

Transactional as were gains Results revenues improved up principal were well $XXX driven sequentially. deferred associated million, with in XX% investments as compensation engagement. plans employee retail by

were basis results. XXXX quarter. asset a management in the flat flat year prior large impacted essentially versus revenues were decline as a quarter Asset first management On market revenues full QX also

of X% movements. and market of broader sequentially the XX% assets trillion prior increased clients year Total $X.X versus reflective

of we period net last client the beginning assets. have several years Over approximately of assets X% seen new

driver we believe billion fee-based results. XX% relevant assets, of towards now The year. client continue While fee-base of advisory these are in flows a from $XX the had an more record. fourth the flows quarter; shift flows near-term total business represent of of of up We continued and the are fee-based to indicator last XX% assets health

Loan prior year. growth to strong Lending $XX increased balances be products. continues versus billion XX% across or the to

receptivity see in offering. to strong continue lending We our

This better into securities investments clients lending in lending. our advisors benefit suite. would who effective Our have identify from enabled been our based especially to product technology has

loan a the sequentially. to stable May XXXX. resulting Within rose growth we seen quarter. in receptivity We fourth in level continue program have bank X% deposit mid-single in deposit strong expect uptick digits our Total with see since seasonal to of deposits

banking our high to also and new traction. continued savings in products yield invest to has continue product We gain

has its March savings billion close Our raised launch. new to campaign money $XX since

including interest amortization. prepayment a last impact slightly Net income quarter. full-year was line was in of with On the up basis NII

the Over we of growth. the would deposits benefit realization rate year and the of our the to continued the forward of full our curve cuts, diversification the three of next expect offset impact lending XXXX

our As nicely in and to also from James said offering the build low. continue U.S. we our drive fourth discussed That being workplace rebound further quarter growth. out to will expect would to invest in we banks QX seasonal margin its

billion management the $X.X Investment of quarter. reported fourth in revenue

period. For prior billion billion increase from the revenues the year's $X representing $X.X a full were

long-term Total AUM rose billion. AUM to $XXX X% which $XXX billion was of

We strongest Long-term of year capped we infrastructure continued positive billion the capital to in X generate strategies. across X years fund. and flows flows major high close another conviction billion our $X.X had strong with the net net raising strong active $X.X were off

fourth of Asset for is average grew core management increased real higher and our results driven $XXX fees estate the quarter. strong are in fees million, were XX% in the versus on third Recall a Performance fees performance management the strategy fees significant quarter recognized AUM. quarter. by amount

private sales by year. who The were funds. asset On million management event driven $X interest billion. was to within fees investment realization increased fund. depend in primarily to $XXX which which quarter ultimate carried interest amount due the the equity in invested up significant basis fund. from generated the revenue, the a an and X% revenues and for Investment and to on billion underlying the year Asia year This IPO clients this $X.X are of earned position private subject the line restrictions underlying monetization full is will accrued quarter a is primarily This of increase of

said previously this have line lumpy. we is As

manager. of impairment an a legacy investment party were and revenues by impacted method Other third a asset equity

XX% of discussed. Total carried was compensation sequentially. just to costs related expenses are event increased I compensation primarily reflective the which higher accrued interest higher In particular

will BC&E an to This higher we to this launching Non-compensation total continues business investment our new meaningful grow earnings. the business. continued of firm and be expenses were reflecting increasingly contributor expect driven into related expenses and it to by products

business to and effectively to continue for opportunities clients. of organic We grow needs our the inorganic look this and to meet

million During of fourth approximately dividend a the and common board $X.X $XX quarter we share. declared our billion or repurchased $X.XX per shares stock

tax discrete the year benefits, XX.X% respectively. rates quarter considering tax full After intermittent net of and and $XXX $XXX our XX.X% and were million fourth million for

to our quarter-to-quarter XX% or XXXX rate be some expect slightly will and We approximately volatility. exhibit tax XX% higher to

results with sized pleased engaged base. entered and are constructive firm's we full expense the pipelines, year. in this highs, clients asset markets, at XXXX right We with it healthy new levels Take a

we up that now line will With the questions. to open

Instructions] first Schorr Thank Glenn [Operator from Evercore comes question Our ISI. you. with

is line Your now.

very thanks Hi, much.

on two-year ROTCE couple Just steady what the of incorporated from curious within or that are we've any Is what particularly your seen the objectives return capital last assumptions into years? state that? now changes what

we will other like we've the what profile prior standpoint haven't It's new from hard it a proposals than technical more just say return to which we until have with the again be sort looks says future we seen are done think of information. Well, consistent forthcoming.

Fair Okay. enough.

in equity surprise illiquidity standard discount. it, gain we Can of out IPO investment fund lockup tell private us downs management company and have I'm that so you what ups so the quarter? On a every a guess that track there's don't we and assuming I is, can

illiquidity that and clarified I'll It grown PE Asia six performed the than nicely. the basis. The it ago quite fourth you has company price the an made it's some into consumer than the it daily quite stock mentioned we’ve our a discount more been Asia products of years quarter nicely and there. information on and more a China the public exchange Kong company ago was public company. give six quite but made more first years I has Hong on went or there's one to successful fund on And in funds. and in IPO The is no is investment you the marked

value $XX than million some we’ve give approximately round and was the the the numbers context of sort around billion. To investment current $X less made is you that investment

and LP ownership we interest and a underlying fluctuating also to going have not we investment be so fund carry in have the small the have the we is So investment monetized. the carried only until

return it's of unrealized I as before above gain. comfortably the but that So today an in we're as threshold preferred said fund

more have if volatility there we'll So stock in price. is the volatility

sum and to corresponding line little given half of size a bit up that IM we just team typically. compensation expect in also investment more has and in the investment the as line IM public carry that it's would So the volatility the would expect we given volatility and about

you. Thank

from next Christian with comes question Autonomous. Our Bolu

Your open. now line is

comp question made May morning. to the I margins be that grid selling beneficial year. recently management be some next a Good wealth believe should changes to on management. wealth you’ve

you question I and on, the pulling lending feels guess the comp broker that, the at drive I the using whether is can what's lever? a client but longer-term, can and think last keep protocol, in more over And industry the consolidation demise like decade you the I it's white house because time? as look thoughts of the to grid technology curiosity of margins over stickiness your it the do for happened

not using behavior We're Well, drive job the I'll grid with do We drive clients. to help to our use take that. the to us grid better margins. a

So have supported have based have asset do decade supported the grid the accounts, supported business. that. with they last most over to been working their of been have clients. who larger They've the exactly producers changes They sophisticated of growing designed complex more

as think item. So the expense of I don't an grid

with business what the as and we're grid really among the result as I top the a think of and advisors of reflects that. stability embrace great what that the to best advisors trying frankly do

the people as modest are more professionalize are changes under per from continue with one over advisor very within changes this transformed is interests were of move which the and Andy the to of decade to compost that go something on. but behaviors goal significant and the and the workforce there XXX,XXX last a you changes another aligned ultimately their the as revenue effectively financial got like being the producing grids Christian from covers the to So group something set is that's person well be to million fantastic a and and focused year are in revenue team

like one's earlier get clarify Can eye. Glen XX%-XX%. just Do does that capital it Okay. you XX% asked time level maybe assumed? the out, like you you what catch go to I because on question Maybe just would and of dollar great It stand capital be clarification. of you does target to to get level to help over Thanks. just back sort XX% just get down the assume to of will ROTCE think that's absolute like the the how

disappoint I'm of see a for our the we not why and businesses the need to an you what of answer. global in objectives to no prosecute across to capital you probably we're investments going Christian and ROTCE making that below two-year upon produce compelling group, share our economic things your have we that exactly the efficiencies market run go currently to to so you'll model the we're growth We based XX% from Yes. to feel of each earnings business in that. ability reason we're using that businesses, those our around we'd net drive like and there's running myriad

time In as these is many, period market we to XX the that over things on of normal a but condition that. and course think bounce any in expectation very quarter would XX assuming reasonable over around we many deliver you've years individual seen numbers

to longer-term it’s longer-term in like business. manage will speaking this see ability aspirations investing looks the impressive businesses scale our various our of that lot have see parts what we in you flat year are given essentially growth non-comp the [immensely] are expenses which embedded way we we projections For pretty of the our the really year-over-year

is do but for the trading believe backs, when of and a are of at process acquisitions as set There you to things is? trying to capital term, what make through potential the longer on reasonable this increase longer along forward XX%. we a the those other do the Are going doing the we're if always investments or of we math when just drive you're business ask XX% the that dividend? you lot kind term buy capital what make wildcard to set much we way. your roll to ROTCE So the for? do is What's the get how you numbers assumptions [seeker] stock There

our ago could on publicly, years and of many Many we XX% I transformation and I management that. XX% business exceeded we target margins a and set or were that when the around wealth get whole XX% thought XX%, helped obviously I said

we Many and constantly X% kids of there, or XX% our when years is culture going management to get growth the there asked were of are and the X% the period. there the and economic this our in reason the set a to normal term we saying why we ago like, on good call now around when around achievable businesses shouldn't we embedded back when kind I car our target these of with we in and to over get in going return are longer ROE was think you got and going get the feeling ROE seat when are discipline compelling strength and no there there's expense be their scale

Thank you.

question Our from next with comes Brennan UBS. Hawken

Your is open. now line

next fair? a seemed here XXXX, at of target more investment and question. Thanks opposed Is wealth be the expect your prior of margin James within over see, that point we to talk a pre-tax morning. the in just self-funding flattening about the a as that up. comments implied guys especially about guys ago out non-comp on stability years. Good with target in have you generally, and revenue the an non-comp, to years. here minute should expecting growth Question step for little you that the a taking the in and two embedded this market you assumptions nice Could Good to

of a in there. questions couple There's

make also we flexibility to I continues is the conservative this continue at the views done of we you as The improvement will and important critically and to which said to generally think nice about around that's to work around It rates in to which We've the James and to done margin do about to lot there. digitalization talked when on continue Morgan we think target a consensus here. in continue which markets is work. customer Shareworks Stanley we've budgets a will experience us experience business XX% client and platform what invest investments the and our use trend. gives our XX% the

don't going so see there's expectations forward. you what I just or around rates And any the we outsized think consensus markets in

think stuff. that expenses about somebody Brennan, write-up and fourth other I think seasonality. some us itself I in had some XX ask address year a [XX.X] We there, probably at finished quarter DCP severance was and we’ve change obviously and the

I said quarter-to-quarter. we is what to be, [XX.X] these out with before but that XX% second year where can't will full growth that third think I been if first guarantee as I've with over economic going there. the we've the things put where around disappointed bounce the I business a done So quarter, that normal just quarter that know quarter I

Well, And responsible margin is it's be we we've deviation think a these can put set higher to it not about higher Why it. It think got targets the approximately we when XX.X, in three do we think going to than revenue revenues range you outcome. XX% outcome XX.X I what margin bring two off we think be why likely XX, outcome on What the not. a that. That's and I likely be as the on a Do dollar incremental high? over the the high. next is incremental grinding of it's is kind a before grinding than standard is years? we coming embedded year margin. incremental the No

will higher. grind So

the Clearly, makes Sure. a That appreciate also, Solium to, up lot should Solium should integration and of also that. acquisition sense.

been might know wealth. XX John fourth the you too those what you severance underlying I basis in comments made think quarter. have said margin and reference the I think I in James points from

XX. to that So you gets

wealth I but had on have the what some talked There you think that don't was DCP would about margin. impact management

us forward? metrics bore can underlying the that going maybe investor disclosing disclose some the it If I that be request you the doesn't underlying line you visibility the but noise makes some which know around or if it, a of could DCP trends. know consider could and bottom please into creates helpful it that let impact It'd just really

Yes.

but that continue based impact contributor not do comment marketplace thought businesses the just reasonable that meaningful we So of around a expense. try versus dollar to the [indiscernible] PBT a highlight before is as it's we I appreciate all comp it in the said material you we amount on swings when I disclosure a to to across in of speaking meaningful and a the to give dollar revenue generally further the give

for think they Your look effectively be we'd comment at fourth one. and though the comment you but we laid we'd that's a feel but basis are by the been is XX.X XX again ratios at that on then out by impacted dynamic we'll one margin. that not new XX negatively we It's have simplify we points I XX thought XX very XX.X quarter definition be give all with we at that obviously the targets comfortable and said what to when precise generated some with these and it obviously appreciate of you using

make you should I I good one we our creates which Brennan DBA a had remember of billion mean the when to these the move moved to noise, bizarre $X old on I sort with year It it think financials. deal point. on have days and used calls impact

good is that a clean The funny the Fortunately, it's we’ve up. managed of news to thing story. DCP, we mean I got kind

the a has people want here messing are XX%-XX positive up well. in with S&P doing invested was was it this stock and what and numbers well the like %. markets was to up because it stock the was in which XX where actually You This the way the be means done

but leave be this that's don't that right think it and that controlling get I if we're I mind year unusual accounting happens noise out what delighted outsized where on why are outcome wouldn't, we the pretty seeing and figure listen I I to XXXX year. mean to in are. I'll the I'll that's team the So if and but we the disclosures

Thank you.

Our next question Chubak comes from Wolfe with Research. Steven

line is Your open. now

Hi, good morning.

morning. Good

X I So deal. on an disclosure the targets appreciated some wealth is there X that's goal. where year it's Solium Certainly significant from of a recognize the post area interest a management to additional conversion Shareworks.

the you think separately somewhat help is over about certainly if conversion opportunity more you either be how have frame of just back-end I that be the going that on on you to goal even that just execute just lot can revenue and hoping incremental you a So or loaded? on-boarding or can target. do maybe to execute to that growth AUM we us ultimately time horizon, it of linear pace was expect

try mean me a that. had I we this first answer for One Let year. X things. of months was only our couple to all results in of Solium

I it think PBT. before to diluted mentioned was we that

diluted obviously margin. to So

it the turn which to We potentially over to will the year margin the and also margin. diluted would then expect effect and and PBT or we acquisition build positive neutral time full to have of and then PBT to be will improve this

be get platform The accelerating. should of and making conversions That that's as the we another done work corporate stages it take the James platform clients just are that sure those all at mentioned the year. several there's integrating will year into this onto Shareworks Morgan then Stanley

at Stanley be and digital of slow we I a work but our think quite converting acceleration into would million base engine. our customers a channel or clients see on we'll you will attractive the real sort an Morgan think if incremental nice advisory of current growth either build a

opportunity. existing again mass versus in different potential so excited whether top was of i.e. another on and bring incrementally think if the cash to impact, the five customers that client we're the net we Obviously, levels but have the assets affluent it's can million we base, asset on high of size net-worth or an our the and years seven will for ultra it's why about new levels high-net-worth dynamics around current

just me. could the fee macro and and just of long-term particularly pool maybe outlooks and the supporting it one I objectives? on assumptions hoping underlying to some IB and some you just on of was trading follow-up industry speak the specifically Got return for near

sorry. I'm what Trading, you did say?

and banking the some as targets. just of as underlying the Trading assumptions some underlying well return investment people macro of

we will get Again, when It data. stable. this I looks so obviously year pretty to the are where pools see think like the pools reporting and that Yes. we everyone the come have finishes out

types I of generally with GDP. about think of think standpoint from a pools budgeting sort growing those we

So points. then that dollars share sort a investment share or our in sort and with and of pool of view growth very percentage we the and type on point limited of couple couple

on track will obviously generally views consensus the so backdrop which for and that's so forth. So and GDP we that budgeting and the macro on use growth U.S.

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you. Thank

from comes next Mike question Our Mayo Fargo. with Wells

line Your open. is now

Hi.

Good morning.

digital I'm management and new over share for management year targets you institutional XX well have last frame continue, and if one-third, the have should five-year of minimum and highlight security, minimum products you're of that's a time you ROTCE longer enough? a XX%. gain initiatives Slide X non-comps look your going flat. what the XX% ROTCE report increase clients all It's through by wondering wealth expect share high are

why raise not So [indiscernible]? minimum that

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to Morgan opening is it about new is a segment up it Stanley. think I

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Thank you.

from O'Connor comes Deutsche next question with Our Bank. Matt

open. Your line is now

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allocate We firm which at level is we firm why efficiency ratio a have the target. resources

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Okay. It's helpful color. Thank you.

you. Thank

comes with question Carrier Bank from Mike of next Our America.

open. now is line Your

Good morning.

Just one me. a for quick

management. investment an Just

We your if carrier quantify just don't I kind mean done have seem private know now side, fees, does much it you you more obviously generate of can the business. maybe of probably get to something that can that's on performance also the because fees? your the It but growing So like much it's well I assets. in interest. have the don't it product development, how from you of in you carried the guys don't have of that. hard magnitude for potential performance of to AUM It's we model kind credit the see

clarity more any would that So useful. be around

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project we've but these the and it to you things again information to out. model difficult So give with to perfect do tried information are very even as

lot. a Okay. Thanks

Thank you.

RBC Our Gerard next Cassidy Markets. Capital with from comes question

Your line now is open.

in Hi like [Stephen there products product guys your this is businesses that is with a Dong] within areas you'd – Gerard. acquisitions? for Are compliment to any

a business vertical product. can the we that open expand to Acquisitions product there a reasons or products and we acquisition do organically. fill strategic on gaps acquisitions. more really significant new or broader a acquisition we business have even about know small and try tend up I don't do we either build pure It's would and unit. scale mean geographically platform a I really a think. talk don't most for I of we

think is the no. answer I So short

the market these question. to that understood. goals since a couple market years or that bear I recognizing your bear should two had the We you three a revenue in us just share Can have likely appreciate last a reach And tools are with considerably you mitigate bear next help targets that last guys the next to we've for the occur years? sustained time market. try of shortfalls to use you'd changed

is right? buying news with X.X and down we're market you're that's more at your basically your back because bear your mean around a shares, tool, about X Good EPS growing I now. is shakeout Expenses. your stocks the peaked low, shakeouts billion

nearly was months bought net year think stock I trading ago. when XX a XXX back last nearly shares we So million around the couple of

a us. gave little that So that was gift God

bear So to to in I think market if sustainable you're it's the to just reflect your hard you restructure fight very organization that. market a got

and all would go become our smaller, we more more You nimble have to competitors through and that. efficient and

plan can't the upon You bear obviously. business market based a

they we an way to won't be subject numbers abnormal the normal page. You got but the will to plan be market from have market one goals always on very and the not other environment. business bull our a on a I've but normal what this where market be note finish that's clear a are been then If environment they'll probably set upon goals or we this I'll as and market based these what's

Thank gentlemen call. today's and you for participating. Ladies you. conference Thank concludes this your

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