Morgan Stanley’s Global Wealth Management Group said its pre-tax income from continuing operations plunged to $244 million in the fourth quarter, while increasing to a total of $1.3 billion for the year.
The Global Wealth Management Group reported $244 million in pre-tax income for the fourth quarter, down 37% from the $390 million the firm earned in the fourth quarter of 2010. At the same time, its pre-tax income of $1.3 billion for all of 2011 represented a modest increase from the $1.2 billion recorded in 2010.
The Global Wealth Management Group’s net revenue dipped to $3.3 billion in the fourth quarter from $3.4 billion in the fourth quarter of 2010. That was brought on by declines in revenue from commissions and investment banking, according to the firm, and was somewhat offset by higher net interest revenue.
That business’s net revenue increased to $13.4 billion for 2011, up from $12.6 billion in 2010, as net interest and asset management revenue increased. Those gains were somewhat offset by lower investment banking and principal trading revenue, the firm said.
For 2011, the Global Wealth Management Group had $1.1 billion in income after its non-controlling interest allocation to Citigroup and before taxes. Pre-tax margin for the year was 10%.
Compensation expense totaled $8.4 billion for the year, with a compensation-to-net-revenue ratio of 62%. Non-compensation expenses rose to a total of $3.8 billion in 2011, up from $3.6 billion for 2010.
Client assets totaled $1.6 trillion at the end of 2011, including client assets in fee-based accounts totaled $496 billion and 30% of total client assets. Global fee-based asset flows totaled $42.5 billion, up 30% from 2010, and net new assets were at $35.8 billion, up 56% from 2010.
Average annualized revenue per global representative came in at $763,000 for the year, with about $96 million in total client assets per global representative. The Global Wealth Management Group had a total of 17,156 global representatives as of the end of 2011.
For just the fourth quarter, the Global Wealth Management Group had $228 million in income after the non-controlling interest allocation to Citigroup Inc. and before taxes. Pre-tax margin in the fourth quarter was 8%.
The group’s compensation expense totaled $2.1 billion in the fourth quarter, and compensation to net revenue ratio was 64%.
The group had $932 million in non-compensation expenses compared to $968 million for the same quarter one year ago. It also saw $4.9 billion in global fee-based asset flows in the fourth quarter, and $6 billion in net new assets in the fourth quarter.
Lorie Konish writes for
