James Gorman, Morgan Stanley's new president and chief executive, has outlined ambitious targets for its global wealth management division, which includes the newly integrated Morgan Stanley Smith Barney.
Speaking at the Morgan Stanley U.S. Financials Conference in New York Tuesday, Gorman presented the firm's global wealth division as tops in the market in number of advisers (18,135), client assets ($1.6 trillion), revenue ($3.1 billion) and number of advisers on the Barron's Top 100 list (31).
However, the CEO conceded that "being big of itself does not get you to the finish line."
Gorman said he expected to boost the pretax margin at the business from its current 8% to 15% this year and more than 20% in 2011. He is also focused on increasing client assets, predicting that the wealth management division would attract more than $20 billion in net client assets this year and $50 billion in 2011.
In 2009 the division lost a net $13 billion in client asset outflows; Gorman said this was largely a result of legacy Smith Barney advisers leaving and taking client assets with them.
Alois Pirker, a research director at Aite Group, said Gorman's targets are aggressive but not unexpected.
"He has an ambitious personality … and he needs to keep the ship on course during the integration," Pirker said.
Pirker said that the $50 billion in net new assets for 2011 is "on the high side," but that he believes it is achievable with such a large brokerage force, provided the integration goes smoothly.