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Morgan Stanley focuses on wealth management
Morgan Stanley reportedly plans to fire a quarter of its fixed income staff, and the move could be another step closer to Morgan Stanley's focus on wealth management.
"If Morgan Stanley downsized FICC, then we believe that would also decrease volatility in earnings and move them closer to a long-term strategy of having Wealth Management be the main revenue contributor to total revenues," writes Brian Kleinhanzl of KBW, in Barron's. "We believe that MS could see a better relative multiple versus the Universal Bank group once the percentage of Wealth Management and Investment Management revenues reach 75% of total revenues (expected to be 51% in 2016)."
Staff cuts always hurt, but it sounds like Morgan Stanley is making smart, strategic moves with this one.