Morgan Stanley Sets $12B Profit Goal for Wealth Unit

Morgan Stanley is betting its wealth-management juggernaut is only just getting started as it outlined a plan to nearly double profit from the business in coming years.

The bank’s new long-term goal of more than $12 billion in pretax earnings will come from a mix of asset growth, more lending and expanding markets, according to co-President Andy Saperstein.

“Over the past decade, we have completely transformed the business,” Saperstein said Wednesday at a conference hosted by AllianceBernstein Holding LP. “It’s only gotten us to the starting line. We are poised for a period of accelerating growth.”

Saperstein gave a much gloomier forecast for the bank’s sales and trading and investment-banking operations. The bank began eliminating about 3,000 jobs this month amid a slowdown in dealmaking. The stock fell 2.2% to $81.55 at 3:23 p.m. in New York, extending this year’s decline to 4.1%.

Saperstein, 56, is one of three men in the running to replace Chief Executive Officer James Gorman, who earlier this month outlined his plan to step down within a year. Gorman is in his 14th year atop the New York-based bank after having climbed to the CEO spot in 2010.

Saperstein runs the firm’s $4.6 trillion wealth-management business, which has seen significant growth in the past 10 years and posted $6.6 billion in pretax profit last year. The business has targeted bringing in $1 trillion in net new assets every three years.