Morgan Stanley is seeking regulatory approval to make financial advisors dual employees of its bank subsidiary in addition to the broker-dealer as the firm increases mortgage lending, a person briefed on the matter said.

The move would allow the advisors to get a national charter for mortgage lending rather than state registration, said the person, who asked not to be identified because a decision hasn’t been made. That would allow them to originate mortgages for clients in multiple states without having to register in each state individually.

Chief Executive Officer James Gorman, 55, is pushing for the firm’s 16,500 advisors to lend to retail brokerage customers as it gains almost $60 billion of deposits from Citigroup Inc. over the next two years. The deposits come from Morgan Stanley’s purchase of the remaining stake in its joint venture with Citigroup’s Smith Barney brokerage earlier this year.

Morgan Stanley is seeking to boost profit margins at its wealth-management unit, which had $1.83 trillion in client assets as of Sept. 30. Interest income has the highest incremental profit margin of any revenue in the business, Chief Financial Officer Ruth Porat has said.

The request for dual status, already used by other retail brokerages including Bank of America Corp.’s Merrill Lynch, is seeking clearance from the U.S. Office of the Comptroller of the Currency, the person briefed on the matter said.

Bryan Hubbard, an OCC spokesman, declined to comment.

Morgan Stanley has said it wants to lend to 10 percent of its individual customers, double the current 5 percent and matching the industry average. The bank is targeting a loan-to- deposit ratio of about 70 percent in 2015, compared with about 55 percent last year, Porat said in September.

Morgan Stanley already has about 200 private bankers to help financial advisors lend to clients. The firm primarily makes floating-rate mortgages with an average loan-to-value ratio of 60 percent, Porat, 55, said in September.



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