2021 was an unusually productive year for Morgan Stanley and its close to 16,000 financial advisers, who brought in record net new assets for the year of $437.8 billion, for an annual growth rate of 11%, according to the company.
Morgan Stanley had an outstanding year when it came to acquiring new client money and now has $4.9 trillion in wealth management client assets across varied business lines, James Gorman, the chairman and CEO, said during a conference call Wednesday with analysts to discuss fourth-quarter results. Morgan Stanley typically sees a net new asset growth rate of 4% to 6%, said Gorman, who sounded somewhat astounded by the rate of growth in 2021.
"This past year, I think we grew [net new assets] at 11%, which is — I mean, it's freakish, right," he said. "You're talking about over $400 billion of new money. There are a lot of asset management companies that aren't $400 billion in size."
"I don't think that's sustainable. I'd love it, but I don't think it's sustainable," Gorman said, adding that he couldn't comment on the future other than to say he expected a "healthy" rate of asset growth.
"And you compound what is now $4.9 trillion, you get to really big numbers, which is why, combined with wealth and asset management, we put them together and currently, they're about $6.5 trillion," he said. "We can see a path to $10 trillion here, and we want to call that because we believe that's going to happen."
Despite last year’s political and social turmoil, 2021 ended up being a tremendously fat year for the broad financial advice industry, from large broker-dealers to burgeoning registered investment adviser networks.
The S&P 500 repeatedly hit record highs last year, benefitting brokerage firms immensely. It ultimately posted a total annual return, including dividends, of 28.7% — almost twice its annual median return of 15.4%.
Over the past couple of years, Morgan Stanley has acquired a variety of wealth management business, and those acquisitions appear to be paying off.
In 2019, it said it said it was buying Solium Capital Inc.’s stock plan business for $900 million. A year later, Morgan Stanley announced two large transactions, the purchase of ETrade Financial Corp. for $13 billion in stock and then the $7 billion purchase of fund manager Eaton Vance. It's also recently invested heavily in its financial adviser platform.
Morgan Stanley’s wealth management group reported net revenues for 2021 of $24.2 billion, up 27% year-over year.
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