Morgan Stanley and Bank of America Corp.’s bets on the brokerage business are finally paying off, helped by U.S. stock indexes near all-time highs. The firms’ own shares aren’t getting the same benefit.
Morgan Stanley Smith Barney, the world’s largest brokerage, will operate with a “mid-teens” pretax margin by the first half of 2013 “irrespective of the market,” according to Greg Fleming, president of the business.
James Gorman strides across the stage of the auditorium on the top floor of Morgan Stanley’s Times Square headquarters. It’s late October, and he’s in the midst of the second investor revolt he’s been through in three years -- the first one coming during the financial upheaval of 2008.
Morgan Stanley’s wealth-management business can reach profitability targets solely through cost cuts, meaning revenue improvements may provide a further boost, said Greg Fleming, president of the unit.