Morgan Stanley at US Financials Conference: Strategic Growth Insights

On Tuesday, 10 June 2025, Morgan Stanley (NYSE:MS) shared its strategic vision at the Morgan Stanley US Financials Conference 2025. Chairman and CEO Ted Pick outlined the firm’s commitment to raising, managing, and allocating capital with a focus on global scale and integration. While highlighting growth in wealth management and alternative investments, Pick also addressed challenges such as AI complexities and US industrial policy.

Key Takeaways

• Morgan Stanley aims to achieve $10 trillion in client assets and a 30% pretax margin in wealth management.
• The firm focuses on a "funnel strategy" in wealth management, emphasizing ETrade, workplace, and financial advisors.
• Ted Pick advocates for a "repositioning of regulation" to keep pace with technological advancements.
• Morgan Stanley targets ROTCE above 20% in favorable periods, maintaining resilience in tougher times.
• The firm seeks growth opportunities in alternative investments and increasing bank penetration.

Financial Results

• Wealth Management: Morgan Stanley is leveraging its wealth funnel strategy, including ETrade and workplace channels, to increase fee-based assets. The firm has seen a significant rise in households served, from 2.5 million in 2018 to 22.5 million currently.
• Investment Banking: While the first half of the quarter experienced a slowdown in deal pricing and announcements, activity has recently picked up with several significant transactions.
• Private and Alternative Assets: The firm currently manages $240 billion in private assets, with potential for significant growth in alternative investments, targeting an increase from 5% to as much as 500 billion dollars.

Operational Updates

• Client Asset Growth: Morgan Stanley is on track to reach its target of $10 trillion in client assets, with current assets at $7.7 trillion.
• Bank Penetration: Efforts are underway to increase bank penetration from the mid-teens to the mid-20s, aligning with industry peers.
• Parametric Growth: Assets under management at Parametric have reached $575 billion, bolstered by strategies like tax loss harvesting.

Future Outlook

• Regulatory Environment: Ted Pick emphasized the need for a regulatory repositioning to adapt to rapid technological changes, rather than outright deregulation.
• Capital Strategy: Morgan Stanley has accreted 10% additional capital over the last five quarters, maintaining strong liquidity to navigate market volatility.
• Dividend Policy: The firm maintains a quarterly dividend of $0.8925, yielding 2.8%.

Q&A Highlights

• Strategic Pillars: Ted Pick reiterated the firm’s focus on strategy, culture, financial strength, and growth as core pillars guiding Morgan Stanley’s operations.
• Long-term Value Creation: Emphasizing EPS durability and ROTCE, Pick highlighted the importance of consistency and adaptability in achieving sustainable growth.

In conclusion, Morgan Stanley’s presentation at the US Financials Conference 2025 underscores its strategic initiatives and growth objectives in a rapidly evolving financial landscape. For a detailed account, please refer to the full transcript below.

Full transcript - Morgan Stanley US Financials Conference 2025:

Betsy, Morgan Stanley: Okay. Thank you, everybody. I have a long disclaimer to read But before I get into the disclaimer, good morning, everybody. We are pleased to have with us today Ted Pick, Chairman and CEO of Morgan Stanley. Thank you so much, Ted, for joining us today.

Ted Pick, Chairman and CEO, Morgan Stanley: Great to be here. Here’s your disclosure.

Betsy, Morgan Stanley: Oh, yes. Well, I have to read this special one. The discussion this discussion may include forward looking statements, which reflect Morgan Stanley management’s current estimates and are subject to risks and uncertainties that may cause actual results to differ materially. Morgan Stanley does not undertake to update the forward looking statements. This discussion, is copyrighted by Morgan Stanley and may not be duplicated or reproduced without their consent, is not an offer to buy any security.

So Ted, thanks again for joining us this morning.

Ted Pick, Chairman and CEO, Morgan Stanley: Betsy, you are thirty five years net at Morgan Stanley? That’s correct. Thirty five years net. And this is the

Betsy, Morgan Stanley: Yes, we’re

Ted Pick, Chairman and CEO, Morgan Stanley: So congratulations, well done, applause.

Betsy, Morgan Stanley: You, Shiloh.

Ted Pick, Chairman and CEO, Morgan Stanley: That was a great chat. Yes, you’re running two years ahead of me at thirty three net and that’s for all of you who know our firm as well as you do, that is what gives me the most joy to work with people who have given their lives to the place and have made a difference and this conference is part of that and you personify that. So cheers to you.

Betsy, Morgan Stanley: Ted, thank you so much. Very much appreciated. And I must say, I thoroughly enjoy working with you as well.

Ted Pick, Chairman and CEO, Morgan Stanley: Fantastic. So we got the mutual flattery thing going, a little cadence there And you’re wearing Morgan Stanley blue, so off we go.

Betsy, Morgan Stanley: Oh, yes. I know to do that. And I also just have been thrilled to see how you’ve moved into the CEO and the Chairman role. It’s been a year since you were here last year as CEO. And since then, you’ve picked up Chairman six months ago.

And what a year it’s been, right? This year has been a year for the record books. And last summer, you kind of gave us that outlook, right? Last summer when you were here, you talked about the end of financial repression and the end of the end of history. That seems pretty prescient.

How are we doing on those two things? The end of the end of history, are we almost over with the end of the end of history or this is going to take a while?

Ted Pick, Chairman and CEO, Morgan Stanley: Sure. I think it’s fair to say we’re at the resumption of history. The principles are what is the firm’s strategy. That is a strategy that’s been years in the making. We raise, manage and allocate capital for clients that is understood.

It’s understood by clients, by owners, by the regulator and by the 2,300 managing directors and the 81,000 people of the firm. We raise, manage and allocate capital for clients. To do that successfully, you need scale, you need real scale and you need to be global. So for us, what’s been most important is to make sure that we have a wealth management business that has the kind of scale that makes us relevant today and for decades to come and to build out a global investment bank that is relevant from Copenhagen to Abu Dhabi. Now, the moment we’re in is complex and it is complicated, it is both, complex.

Complex meaning intricate. We are all witnessing in recent weeks mass democratization of folks using various forms of chat happening. We’ve gone from the most embryonic of AI, Gen AI to we’ll call it early innings. We’re all comparing different sources and it’s happening multiple times faster, Moore’s Law style than Erich Schmidt predicted with the yellow pages in Google. So AI and the decades to come on that are the strand of, we’ll call it, complexity.

The strand of complexity is energy transition, sources and uses of energy, energy for the national interest, the international interest that will be with us for decades. So those are two complexities. Now let’s talk about complication. Complication means uncertainty. The complications associated with The U.

S. Attempting to re architect industrial policy and address fiscal and trade imbalances through the three pronged approach of tariffs, taxes and dereg. So this bears on our firm and our strategy that we are scale and we are global and we are relevant to clients, whether they be high net worth clients, corporate clients, sovereign wealth funds, asset managers that we’re able to be there to give insight at a moment of, we’ll say structural volatility where people want to talk to someone and get a sense for whether they should be contemplating action or not. You need the scale, you need to be global to have that ability to be close to the client in the moment we’re in. Okay.

And I don’t think that the two strands of complexity are going anywhere soon, which is to say they will be with us and I know that that complication is going to be with us for the next period of time. So the combination of that makes this quite a moment of wow, there’s a lot going on, how do I synthesize, how do I think about next best action and that is where the financial advisor, the investment banker, the equity salesperson, the fixed income structure, the asset manager comes into play.

Betsy, Morgan Stanley: So an opportunity for opportunities?

Ted Pick, Chairman and CEO, Morgan Stanley: Correct.

Betsy, Morgan Stanley: Okay. And the environment really hasn’t changed how you’re thinking about managing the business? It

Ted Pick, Chairman and CEO, Morgan Stanley: has to be contextualized in how the business feels like it’s progressing, all right. The reality is, if we think about the moment, the quarter for example, against the backdrop of strategy at large, let me talk about the moment specifically. It’s an interesting one. We had, I’d say, max tariff vol uncertainty from the time of the earnings call where we talked about a pause not delete and that extended through the half of the quarter. If you think about our wealth business, we had tax season, but the wealth business has continued to prosecute the mandate as we want it to, continues to progress.

The markets businesses coming off a torrid first quarter experienced some of that pause, but with the S and P grinding higher, the wall of worry being climbed, the sense that perhaps the outlooks are in fact improving again, the markets businesses led by our equities business, but also the stability of fixed income have hung in there. I would call out the investment banking product. It’s important to Morgan Stanley, of course, it’s the edge of the wedge with respect to advice to the C suite, although it’s one line item of one business of one division, but it’s important to the audience to get a sense for, we’ll say, animal spirits in the boardroom and that is best encapsulated by M and A cadence and IPO frequency. And the reality is that for the half of the quarter, so well into May, the pause was a real pause. You didn’t see deals getting priced on the IPO calendar and the announcements had pretty much ground to a halt.

What’s changed in recent weeks is we started to see the announcements pick up. We represented a sponsor, the Jordan company in the sale of Sovis to Motorola, an asset worth about $5,000,000,000 Same kind of size, we advised AT and T in their purchase of Lumen’s fiber business. Those are in the $5,000,000,000 range, both strategic announcements. Then Toyota Industries, their privatization, your stomping ground in the mid-30s, Cox Charter in the mid-30s. I’m calling out those four transactions not just because we were part of them, but because they represent different buyer types, corporate sponsor and they’re global, again getting to global scale.

So that is encouraging. We’ve seen those announcements and we see them hitting the tape and that’s positive. Similarly, we’ve seen the ECM counter picking up. Half a dozen deals have priced IPOs and they’ve traded well and there are a whole bunch more in the pipeline. So I do think investment banking specifically is a tale of two quarters, one that started slow, really, pausing in a big way And now it’s picked up and I think we’ll see how the last couple of weeks go, but it looks like it’s going to finish strong.

So I’m encouraged by that in light of the complications that exist because it means that clients are actually engaging and taking action against our counsel.

Betsy, Morgan Stanley: Excellent. So as we think about a bit longer term, let’s think a little bit longer in terms of generating growth and delivering growth. And you’re managing Morgan Stanley as an integrated firm with four pillars of strategy, culture, financial strength and growth and the growth driven by investing across the firm. And I did just want to understand, where do you see opportunities to prioritize investments as the integrated firm positions for what could be prolonged volatility or not, we’ll see how it plays out. So just thinking about the priorities for investment and priorities for growth in each of the business please?

Maybe we could start with institutional securities.

Ted Pick, Chairman and CEO, Morgan Stanley: Yeah. I mean, let me say that I think it’s important that you’re that you articulated the I’m ambivalent about the idea of memorization. Memorization had its day when we were growing up, you had to memorize and now sort of why memorize when you can just look it up. I am now a fan again of having some level of common vocabulary amongst senior leaders of the firm, not because they sort of compelled to say it, but because there’s sort of a sense of repetition if there’s a real belief system behind it. So it’s to say that we raise, manage and allocate capital for clients that those are table stakes, but people say, okay, they have a clear and consistent strategy, it’s durable, they know what it’s about.

So too with the four pillars. The four pillars, you have to have a sense that the partners don’t just say it by rote, but they understand what that means and then informs our activity, especially during periods of uncertainty. And so as you say, what are the four pillars? The four pillars very clearly are that clear and consistent strategy that I just articulated that we have a culture, a culture of rigor, humility and partnership that’s born of our history from before the financial crisis and the ninety seven merger of the financial crisis and the years after that, that we much are focused on enduring financial strength, the stability that owners need to see in the currency over the long span of time, earnings, liquidity, capital and then growth. Now growth can mean two things, growth can mean growth in businesses or it can be global growth.

And of course, I mean to say both. So put that against the moment we’re in, I think if you sort of were like had a right onto our leadership team meetings, our operating committee over the last four months, what I’d say is we segmented this into and we talked about it at the Managing Director Open Forum, we thought about red, amber, green, okay. Red, amber, green not as a strategic phenomenon, but against the reality of we have these complexities and then we have the uncertainty as we work through the three prongs that the administration is looking to achieve on. Not a lot of red, we liked it in the fall, we’re going to keep going. Some amber though, some amber, do we really need to push forward on that or should we reconsider it, de prioritize it?

I think that’s important. You don’t want to have the budget be a constantly revised document, but it shouldn’t just be something that’s check listed. There should be some dynamism. And then green, what’s green and this of course is why this conference and forums like it, yours being the best are so important, which is where is the growth, what’s green, just tell us why we want to be owners and part of the Morgan Stanley ecosystem. Green is the wealth funnel, green is the wealth funnel.

E Trade, workplace, financial advisor, that’s the funnel, sort of an inverted Maslow’s hierarchy of love, okay, that’s the funnel. Investment bankers, the core advisor, the trusted advisor, class business in a class way, the financial advisor, the investment banker, get after that. Durable markets businesses, where you have performance from equities and from fixed income that can be modeled and you could put a multiple on. It doesn’t mean there’s no risk, but it means it’s largely financing business or it’s largely cash tickets, where we really are risk managing the thing super well. And then our investment management business where you have solutions and you have a look into alts.

Those are all part of adding to the scale of what the firm is, they are all part of the global nature of the firm and they are all part of raising, managing, allocating capital, that’s where we are green, green as a strategic matter and it is so important to me and to the team that we don’t conflate tactics and strategy. It is the case that when you have maximum tariff vol in the month after the quarter begins that some people are going to say, wow, this looks like it could be a real pause, but the pipeline remain, in fact, in some places, the pipeline has actually grown. The pipeline has actually grown and interestingly, in some places, we’ve actually seen corporates moving. For all the talk about sponsor portfolio companies in the ground and the need to remanufacture and do the whole capital raising flywheel, that is of course the case, but it is the corporate community that I’d want to call out here because we had five years plus or minus or certainly three, three point five of the pandemic and then sort of the aftershock of the pandemic and then we went into the election and all that’s come from that with a three pronged approach.

I think the corporate boardroom around the world is saying, we do need to act. The world has higher structural volatility, we’ll factor that into our cost of capital, whatever jurisdictional national interest risk, but we’re going to move forward on that. The reason I want to mention that again is because that is all part of the activity based green of what we wish to do and especially if there’s dereg, which I’m guessing we’re going to get to that it’s important that we stay on the green, but people know what the green is irrespective of a complicated moment. And the green again is working the funnel and wealth, working investment banking, working a durable markets business, working solutions inside of I’m and then working by the way automation and digitization inside of our infrastructure businesses and everybody has an equal seat at the table. So that’s how I’m thinking about green and top down for the businesses.

Betsy, Morgan Stanley: Excellent. That was very clear. How do we think about that deregulation that’s on the coming and Michelle Bowman as you know gave a speech on Friday outlining

Ted Pick, Chairman and CEO, Morgan Stanley: the Can I deep dive a couple of the businesses though?

Betsy, Morgan Stanley: Oh, The

Ted Pick, Chairman and CEO, Morgan Stanley: risk of killing the clock? No, I’m not. Because I DREG is important, but I just I want to just do a little more on the business. You’re cool with that? Yes.

To your show. Okay. So

Betsy, Morgan Stanley: Not right now.

Ted Pick, Chairman and CEO, Morgan Stanley: It’s you. All right. I know. No one can say we scripted. So no, but I’m super pumped up about the businesses, really important, if you’re cool with it, for me to just dive a little deeper.

Okay, so let’s talk about the wealth management business. This is a $60,000,000,000,000 space as you know better than anyone and we have a $6,000,000,000,000 position. So that’s extraordinary. We have enormous scale at $6,000,000,000,000 but we only have 10% share. Extraordinary TAM growing and we are six out of 60, okay.

I think about that and I think about what that means in terms of things that we want to focus on inside of the wealth product and inside the investment bank given the priorities I just outlined. Well, we clearly want to invest more in the funnel, we want to invest more in our bank product and we want to invest more in alts. So think about that in the context of client acquisition strategy, all right. Memory lane very briefly, in 2018 Morgan Stanley was partnered with 2,500,000 households, we were in 2,500,000 households, as you know better than anyone. Today, we’re in twenty, two point five to ’20.

So it’s a whole new ballgame in seven years. sort of metric or statistics, statistic around penetration. We talk about the funnel, we talk about bringing assets into the funnel, again reminder, the funnel is self directed E Trade at the top, workplace in the middle, the financial advisor, the 15,000 financial advisors and the fee based assets that can be modeled with a multiple, not all assets are meant to go there, but that is the golden chalice, okay, for the firm, for the client, for the ecosystem, we believe for valuation on a long term basis. So we talk about assets coming in, but we should talk also about assets inside the funnel itself. So when people say what is this workplace, this workplace is for more than half the S and P, we are the monoline workplace administrator, I.

E. We do stock plans. Well, stock plans, when the stock works over time, are dividends, there are bonuses, there is accretion of value and there is a monetization opportunity, I think now I need a financial advisor and let’s get her connected to a financial advisor, so she can start planning for her family’s wealth. In the last five years, 300,000,000,000 has moved from workplace to financial advisor inside the funnel, dollars 20,000,000,000 in the last quarter alone. We call that reinvestment and when times are good that reinvestment is running at 10% per annum.

So it’s not just the assets inside outside the funnel coming in, it’s the velocity of the assets inside the funnel working their way towards the financial advisor when it’s appropriate. So that’s those are two statistics around client acquisition strategy. Bank strategy, I would argue bank strategy on bank penetration, we’ve been lighter than others. We have mid teens penetration. The peer set is in the mid-20s.

There’s stuff that we need to do, we have been doing. Bespoke and tailored lending for high net worth individuals. Folks inside of our corporate stock plans who should get preferred access and of course if you’re going to make loans you need to raise deposits. How are you going to raise deposits? Well, part of the way you’re to raise deposits by really making a regular way checking and banking services available to your client base through the wealth channel.

We’ve been slower on that. We’re quickening the pace. We’re going to get that done and we are going to offer preferred services and have begun to do that for some of our corporate clients raising deposits. And then the last piece on bank strategy is all the way across the firm, the integrated firm, there are places inside of the markets business where we could put assets onto the bank and that just gets us to where the peer set already is. That has funding implications and it’s just a smart thing to do.

So focus on bank strategy, that’s And then last on wealth management would be alts, okay, alts. So of the $6,000,000,000,000 of assets in wealth, 4,700,000,000,000.0 of those are inside of the world of financial advisor, the current weighting of alts in aggregate is 5%. We could debate in this moment where liquidity is getting repriced whether the right level is 10% or the traditionally modeled 15% number, maybe it’s 10%, maybe it’s 15%, maybe it’s more, but it’s somewhere in that range, just for kind of all waiting for ultra high net worth. That means that today we are structurally underweight in the system $250,000,000,000 to $500,000,000,000 in all. By the way, Morgan Stanley is by far the leading distributor in all at sometimes we’ve been more than the others combined.

So we’re already there. It’s not like you have to introduce the product to the client. It’s just something that’s going to continue to build. That makes us relevant to the in the ecosystem to all the players, okay? So that’s a structural underway.

And then you say, okay, that’s interesting. You’ll sort of normalize into that. But what about innovation? Innovation, we have inside of the SEC right now, the commission is reviewing a product that’s effectively a fund of funds product manufactured by the firm where we select managers. It would be to accredited retail investors.

It’s evergreen single ticket. Wow, wow. Okay? We’ll see how the product goes, but now you are we are acting as manufacturer, but sort of expert in the innovation to distribution of alts in a different way, in a diversified way to clients. Very briefly on the other businesses, what I’d want to call out Betsy, in investment management, Parametric, absolute jewel from Tom Fowson, Advanced, great firm, Parametric now, $575,000,000,000 of assets under management, we continue to grow that.

Tax loss harvesting, portfolio optimization, it’s a huge number and we’ve hit escape velocity and the innovation there is enormous. This is part of growth. It’s not just where there’s re weighting in the markets about intellectual capital being brought to bear. And our alts business, which we haven’t talked about as much actually is up to $240,000,000,000 We have $240,000,000,000 of private assets. It makes us relevant.

We’re going to continue to scale that and there are opportunities to effectively act and distribute. And then finally, the investment bank, last year on the investment bank, it took a long time for the investment bank to make the slide deck, right, decade plus, but it’s in there in the context of durable returns, investment banking, financing businesses in securitized products group and fixed income, world class credit organization, world class prime brokerage and equities, world class cash business. These kinds of businesses are durable, they fit in beautifully with the model, clear and consistent and durable strategy of generating returns. So taken together, those are some of the exciting things that are going on in the business and they fit very much in the green. And that green very much fits in the encapsulation of what the strategy is.

Betsy, Morgan Stanley: So it sounds like there’s some very interesting growth opportunities ahead.

Ted Pick, Chairman and CEO, Morgan Stanley: Yes.

Betsy, Morgan Stanley: How does deregulation fit into all of this in the sense that we know Michelle Bowman’s agenda from her speech on Friday. And I’m just looking to understand, what are your thoughts on what that likely deregulation that’s coming or maybe I should say the lightening of regulation that’s coming means for markets in general and our industry and for Morgan Stanley?

Ted Pick, Chairman and CEO, Morgan Stanley: Right. So that’s an important question and a pertinent one today. I think it is it’s a typical thing for a leader of a firm to get up and say, we have too much regulation, we should have less regulation. That’s sort of like a kind of regular way thing. You’ve been hearing that forever.

I think the existential need for real regulation and re regulation after the great financial crisis of two thousand and eight was proven out by the enduring strength that was part and parcel of the build afterwards, where the GSIB fees really built capital, liquidity, management credibility and that was a long march as we were very much on that path and that takes time. And then there was Dodd Frank and time marched on. But as time went on, capital, whether it’s financial capital or human capital, it’s like water. It finds a place. And I think we know that some of the financial capital and then even some of the human capital started leaving the GSIFEs, we were great training grounds, but maybe not the end destination and less regulated firms started doing essentially some of the same activities and part of the ecosystem and we’re thrilled to have them as clients or frenemies or whatever the positioning is in the ecosystem, but it kept going.

Contemporaneously, the lack of transparency and the lack of proportionality around some of the regulation for the incumbent legacy firms actually grew. So we’re going like in the wrong direction and we saw that with the vagaries of the CCAR exam and some of the horizontals and stuff. And I think our positioning because we remember very well, humility, humility of where we were in 2,008 is, we when regulators jump, we’re already in the air. And I believe our competitors seem kind of mentality, do as you need to do, but I think it was getting to a point where we actually ran have run the risk of being less relevant when there is a market tremor, when there’s event. We’re relevant and then it’s like, where’s the problem going to be?

Now history rhymes, that’s super important, remember that. So and we’re in a risk business and human nature and that’s why when people say dereg, I wouldn’t want to say less regulation, I would say repositioning of regulation around the reality that technology is moving so fast, okay. Let’s think about what is relevant five, ten years from now with all the technology we’ve been talking about and we can go in 100 directions on that. But let’s also talk about the fact that the end of financial repression has come and the resumption of history is here. What does that mean?

That means real interest rates and that means real national interest. I’m using the word interest in two different ways, okay? Real interest rates and real national interest. Real interest rates of course, mean interest rates, inflation and the rest, cost of capital and reconsideration of regional and national interest and global hegemony and all that good stuff. That means things are going to happen.

Not that things haven’t happened for the last ten, fifteen years, but when you’re at zero, zero and then the Fed comes in, things are going to happen and there will be success and there will be failure. It’s called capitalism at some level on a global scale. So it is opportune against that and given the pace of innovation that’s going on and we can go 100 different directions on that, that the regulator is best now positioned and should give real consideration to a repositioning to things that can happen in the system where the main firms can be GSIFIs that have excess capital of depending on the firm hundreds of basis points, excess liquidity, tenured management teams that we actually are relevant in not just powering the real economy, but to be helpful when there is a wobble, when history resumes. And that’s why I think it is opportune for a repositioning of some of the regulatory framework, not so much dereg, but a kind of repositioning of regulation. So we kind of hit more of an even keel and for me also just to kind of toot the Morgan Stanley horn, I mean, we are in the talent business ultimately, right, financial capital, but human capital.

So I want we want people to come to Morgan Stanley for twenty years, twenty five years, thirty years, it’s a lot to ask, but not two years and then they go to the other place that’s less regulated. Okay. We want folks to be here, but we got to show that we got game, we got to show we’re relevant and we got to make the case affirmatively to the ecosystem and to the regulator that we and our main competitors can handle, can shoulder that responsibility, not to necessarily be the axe in the system, but to have the kind of role that people traditionally associate the G SIFIs with having. And of course, that’s super important because we continue to scale, we continue to run a global business, it becomes part of the kind of the magic of fulfilling the strategy.

Betsy, Morgan Stanley: And you see this repositioning of regulation as helping create the situation where you can be more relevant. Is that fair?

Ted Pick, Chairman and CEO, Morgan Stanley: Well, we have excess capital as you know. The levers are what we know them to be. I remember a time when we were paying scrip dividend, we kind of cadenced our way through it and now we’re at $0.09 $25 a quarter. We’re on a cadence and I like the cadence, okay? The dividend is sacrosanct, all right?

And we’re at 2.8% dividend yield and shareholders like it and it’s not elevated dividend yield because the currency has underperformed, it’s that the dividend continues to work along on a reasonable cadence, okay? Dividend over the long term. The buyback opportunistic, I think we’ve done a bit against the grain where we haven’t bought as much stock back because I like the idea, the team has liked the idea of accreting capital as we thought the complicated period was here and we’ve accreted 10% additional capital as you know over the last five quarters. Been focused on the consistency of earnings, consistency of earnings over these five quarters has been what it’s been. That leads then investing in the business.

You’ve heard me green, green, green, lots of places to go. And then I would just say sort of interesting that the inorganic question of course early on let’s say a year ago, we’re just getting into our seats, right? And what I would say is but the firm hasn’t, the firm has been on this path and we know the strategy. We’re getting incoming and I think the discipline has been really a necessity to get looks to be educated and then to sort of keep moving along of what we got, But would say that the opportunity to continue to scale, to continue to go inorganic is interesting in a world where potentially we may not be SLR constrained. I don’t want to put the cart before the horse, we have to see what the regulator, what the Fed has to say, but in the instance or in the if the numbers shake out where we’re no longer SLR constrained, well folks that know us well will see that on a CET1 basis, we have quite a bit buffer and that buffer presumably just would probably grow if we do our jobs, we have to do our jobs and then there will be opportunities that are out there to continue to scale, to continue to think about the global franchise, which is why I spent so much time talking again about principles of what the strategy is and then what the four pillars are and then where we want to grow.

As we will say, wait a are they entertaining something inorganic at this time? We are not. But you would hope that if opportunities come through, they would fit with the forty minutes of the chat, okay, that we’re not going down a new path and changing the narrative, but when you’re a 10% player at $6,000,000,000,000 when you have $7,700,000,000,000 of assets and you still are only a piece of a massive market called wealth and investment management And when you’re a global investment bank and you’re a leader and you only have thirteen, fourteen share, there is a lot to go. And so that I think is really very exciting.

Betsy, Morgan Stanley: Excellent. And you did just bring up some of the metrics that lead into the key targets that you’ve got on client assets of $10,000,000,000,000 right? And

Ted Pick, Chairman and CEO, Morgan Stanley: at

Betsy, Morgan Stanley: 7,700,000,000,000.0 did you say?

Ted Pick, Chairman and CEO, Morgan Stanley: Yes.

Betsy, Morgan Stanley: Okay. You’re really close to these targets each one of them. Client assets is very close. You’ve got the pretax margin in wealth at 27.2%. That’s very close to the 30 And your Roxy goal, you’re very close to that as well.

I guess the final question I have here for you Ted is, how do you feel about the last mile of hitting these targets? Is it organic just continue to continue? Or is there anything else that you want to highlight on the key drivers to hit these targets that you’ve laid out?

Ted Pick, Chairman and CEO, Morgan Stanley: I think about what the leading analysts who has to make a decision sell side on whether they like the currency buy side, whether they want to recommend it to the portfolio manager is thinking about how to model the full value of the firm. And ultimately that has to be premised on the kind of multiple that means that we aren’t thinking about these targets as a moment in time. The $10,000,000,000,000 is simply compounding. If you believe that asset prices go up over time and you believe that, remember there is $8 to $10,000,000,000,000 of assets that are held by existing clients away as part of this 54,000,000,000,000 that we don’t have. So the compounding, the flywheel of wealth, the funnel that’s beautifully, brilliantly managed, we keep doing that and the fee based asset phenomenon, it just makes life easier for the analyst to model what enterprise value is.

And then if we can continue to do that in I’m and the Investment Bank, it gets you to a place where there’s real value having reached the $10,000,000,000,000 and the 30% margin phenomenon, it’s sort of an intermediate output. It’s an output, but it’s not PBT. I want to grow PBT. The focus is not in the slide deck per se, but my goodness, we’ve been focused on the durability of EPS. Of course, we are activity based.

Of course, we’re subject to how the market is and the economy is behaving, but we’re not recession proof. But the reality is that if we develop this kind of consistency around earnings, it manifests itself as you well know in a higher earnings multiple and I think it is absolutely critical that when we get to the 30%, it’s not a moment in time, we hit 30%, let’s go on to the next topic. Let’s do 30 in a natural way, not having starved the business, having invested in the business, let’s get to the 30 in the fullness of time and let’s be at that 30. And then in the aggregation of the rest of the businesses that we continue to generate EPS, that we continue to generate growth, growth in the businesses, durable growth, global growth such that when you see the ROTCE pop out in a very good period, it is above 20%. And then in a tougher period, the lows are higher lows that we’ve been able to navigate not just the complexity of AI, not just the complexity of global energy transition, but the complications of any given moment where there is going to be kind of a market window mentality that we have the kind of durability that we’re able to generate real returns above cost of capital.

Betsy, Morgan Stanley: Well, that’s very clear, very thorough and a focus on growth and sustainability. Ted, thanks so much for

Ted Pick, Chairman and CEO, Morgan Stanley: you.

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