Morgan Stanley's Focus on Wealth Management Increases Stability Amid Economic Uncertainty

Morgan Stanley has built a more stable business model, and its shift to wealth management from investment banking will continue to be a main part of the company’s story over the long term. Investment banking is capital intensive, and many banks, especially the European investment banks, have had trouble generating adequate returns in that business and have purposely shrunk that business line. Morgan Stanley has remained dedicated to investment banking and has gained market share. The company had relatively strong returns on equity in its institutional securities business of about 14% from 2020 through 2024, but only averaged about 11% over the previous decade.