What Morgan Stanley actually does
Morgan Stanley has three main businesses: wealth management (advisers and platforms such as E*TRADE), institutional securities (investment banking and trading), and investment management. It was founded in 1935 and is one of the largest US financial firms.
How the business makes money
It earns fees for managing client assets, commissions and interest from brokerage clients, and fees for deal advice and trading. Over the last decade it has built up wealth management, which provides steadier income than deal-making and trading.
The dividend story
Morgan Stanley pays a quarterly dividend, and has raised it substantially since reducing it sharply in 2009 during the financial crisis. Like other big banks, the amount it can pay depends on regulators’ annual stress tests, so it is not guaranteed.
What to keep an eye on
- Markets. Asset values drive wealth fees.
- Deal activity. Investment banking slows in downturns.
- Regulation. Capital rules limit payouts.
- Interest rates. They affect client cash balances and lending income.
Quick take
Morgan Stanley has become more fee-driven and steadier, with a growing dividend that still moves with markets.