stockrowWhat it does
Morgan Stanley is a global financial services firm that helps governments, companies, institutions and individuals raise, manage and allocate money. It is headquartered in New York City. Ted Pick is its chairman and chief executive officer.
The company operates through Institutional Securities, Wealth Management and Investment Management. Institutional Securities helps companies and other organizations raise capital and advises them on transactions such as mergers. It also trades and makes markets in financial instruments, lends to clients and provides services to investment firms. Market-making involves facilitating clients’ purchases and sales of securities and other financial instruments.
Wealth Management serves individual investors through financial advisers, self-directed accounts and workplace programs. Its services include investing, financial planning, banking and lending. Workplace programs include administering employee stock plans.
Investment Management manages investment strategies across public and private markets. Its clients include institutions, while individuals generally access its products through distributors. Its offerings cover equities, fixed income and alternative investments.
Morgan Stanley runs these businesses as an integrated firm: a client can use services from more than one segment. For example, a company can use its investment bank while employees use its workplace services. The firm also provides research and works with clients seeking financing.
How it makes money
Morgan Stanley earns revenue from advising clients, underwriting securities, trading and financing, managing investments, and providing wealth and banking services. The mix varies with client activity, asset values, lending and market conditions.
In Institutional Securities, investment banking generates underwriting and advisory revenues when clients raise capital or complete transactions. Markets activities include sales, financing, prime brokerage and market-making in equities and fixed income. The segment also originates loans and provides secured and securities-based financing. Client activity and balances can affect its results.
Wealth Management earns asset management revenues from investment services, transactional revenues from client activity and net interest income from banking and lending. Fee-based client assets provide an ongoing source of asset management revenue, although the amount can change with markets and client flows. The business also offers stock-plan administration and other workplace services, financial planning, custody and brokerage.
Investment Management earns asset management and related fees from managing client assets. It can also earn performance-based income and other revenues; those include gains or losses on investments in private funds.
In 2025, higher market levels and accumulated fee-based flows contributed to Wealth Management’s asset management revenues. Investment Management’s fees rose with higher average assets under management. Morgan Stanley also earns net interest income in Wealth Management. The company faces pricing pressure in institutional trading and investment management, and pricing is one factor in competition for wealth clients.
Customers and how it sells
Morgan Stanley serves corporations, governments, financial institutions and individuals. Institutional Securities also serves ultra-high-net-worth clients. Investment Management’s institutional clients include pension plans, foundations, endowments, sovereign wealth funds, insurers and corporations.
Wealth Management reaches customers through adviser-led, self-directed and workplace channels. Its customers range from individual investors to businesses and institutions using services such as stock-plan administration. Individual Investment Management clients generally reach its products through affiliated or unaffiliated distributors.
Morgan Stanley operates from offices and branches throughout the United States, with principal offices in London, Frankfurt, Tokyo, Hong Kong and other financial centers. Its Wealth Management business is primarily in the United States; its institutional and investment management activities serve clients across regions. The company has employees across countries worldwide.
Some clients use more than one segment. The combined measure of Wealth and Investment Management client assets can include the same assets in both segments when Wealth Management client assets are invested in Investment Management products.
Suppliers and costs
Morgan Stanley’s business depends on employees, technology, funding and outside service providers rather than manufacturing physical goods. It seeks to attract and retain qualified employees while managing compensation and other costs. Its compensation programs include salaries and bonuses, with some adviser compensation tied to revenue.
In 2025, the increase in compensation and benefits expenses from the prior year reflected higher formulaic payouts to Wealth Management advisers, higher discretionary incentive compensation in Institutional Securities and higher salary expenses. Non-compensation expenses also increased, reflecting higher execution-related expenses and technology spending.
Morgan Stanley said its second-quarter 2026 technology-driven spending supported infrastructure, AI-enabled efficiencies and business growth. Its ability to access capital at competitive rates also affects its position, particularly in capital-intensive underwriting, trading, financing and market-making activities. Credit spreads and ratings influence those funding rates.
The firm and its third-party providers face cyber and information-security threats. It also faces extensive regulatory requirements covering capital, liquidity, client protection and other activities.
- Revenue$119.7B
- Cost of revenue−$4.7B
- Selling, general and administrative−$39.5B
- Other operating costs−$4.5B
- Operating income$71.0B
Competitive position
Morgan Stanley competes for clients, market share and employees with commercial and investment banks, broker-dealers, private banks, investment advisers, digital investing platforms, asset managers and financial technology firms. Competition extends across the United States and international markets.
In wealth management, the company competes across adviser-led, workplace and digital channels. In institutional securities, electronic trading and new technology contribute to pressure on revenues. Investment managers and distributors also put downward pressure on fees. Morgan Stanley identifies reputation, client experience, investment performance, execution, innovation and pricing among the factors affecting its position.
It was reported on 26 October 2026 that Goldman Sachs, Morgan Stanley and JPMorgan Chase were leading Anthropic’s planned public offering. The firms operate in investment banking, an area where Morgan Stanley competes with other global investment banks.
Our reading: Morgan Stanley’s breadth across investment banking, workplace services and financial advice can reinforce client relationships, because corporate relationships can bring employees onto its wealth platform. That advantage is meaningful but depends on retaining those clients and converting them to advice relationships.
Our reading: Global reach, capital access and experienced employees support its institutional business, but they are not exclusive advantages; other firms also have capital and broad offerings, while technology and pricing pressure can erode returns.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Goldman Sachs | Investment banking and securities underwriting | High |
| JPMorgan Chase | Investment banking and securities underwriting | High |
Growth opportunities
Morgan Stanley seeks to grow by connecting corporate and institutional relationships with its wealth platform. Workplace stock plans can introduce employees to the firm, after which it seeks to retain them and provide financial advice. The company is investing in product capabilities and tools such as LeadIQ to match individuals with advisers.
In the second quarter of 2026, Wealth Management added net new assets. Morgan Stanley said stock-plan initial public offering flows represented just over half of that quarter’s total. It also said Investment Management had long-term net inflows during the quarter, supported by demand for alternatives, solutions and fixed-income strategies.
Morgan Stanley seeks to grow standalone Wealth Management assets. The company said its integrated businesses’ addressable markets are growing at nominal GDP plus and that it is gaining wallet share. It is investing in technology, distribution and product development to serve clients.
The company also evaluates acquisitions that could add capabilities, clients or geographic reach, while saying its current preference is organic growth. It expects strategic rationale and cultural fit to be necessary conditions for an acquisition. Institutional growth depends in part on clients’ demand for advice, capital raising, trading and financing.
- $61.1BFY2021
- $65.9BFY2022
- $91.8BFY2023
- $107.3BFY2024
- $119.7BFY2025
Structural risks
- Market risk: Changes in prices, interest rates, spreads, volatility or market liquidity can cause losses on positions and portfolios. Extreme market events can produce significant losses.
- Credit risk: Borrowers, counterparties or issuers may not meet their obligations. As a clearing member, Morgan Stanley can also incur losses from customer defaults or misconduct and defaults by other clearing members.
- Liquidity and funding risk: The firm may be unable to finance operations if it loses access to capital markets or cannot readily sell assets. The parent company depends on payments from subsidiaries to fund its own obligations.
- Operational and cyber risk: Failed processes or systems, human conduct, cyberattacks and third-party vulnerabilities can disrupt business, cause information loss or damage its reputation. Insurance and contractual protections may not cover all losses.
- Legal and regulatory risk: Morgan Stanley faces extensive supervision, capital and liquidity requirements, and restrictions on some activities. Noncompliance can lead to sanctions, financial losses or limits on its businesses; regulatory changes can affect its operations.
- Competition: Financial services firms and other entrants can pressure pricing, revenues and profitability. Electronic markets and downward pressure on investment management fees are continuing competitive challenges.
Bottom line
Our reading
Morgan Stanley combines transaction-sensitive investment banking and markets businesses with wealth and investment management activities that earn ongoing asset management fees. Its integrated model can connect corporate clients with individual investors, but asset values and client activity still affect results. [item7] [call_qa]
The business also relies on funding, employees and technology while carrying market, credit and operational risks under extensive regulation. Competition and pricing pressure can affect each of its segments. [item1] [item1a]