Morgan Stanley (NYSE:MS) Q4 2014 Earnings Conference Call - Final Transcript

Jan 20, 2015 • 08:30 am ET


Morgan Stanley (NYSE:MS) Q4 2014 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, welcome to the Morgan Stanley Fourth Quarter Earnings Conference Call.

Kathleen McCabe

Good morning. This is Kathleen McCabe, Head of Investor Relations. Welcome to our fourth quarter earnings call. Today's presentation may include forward-looking statements which reflect management's current estimates or beliefs and are subject to risks and uncertainties that may cause actual results to differ materially.

The presentation may also include certain non-GAAP financial measures. Please see our SEC filings at for a reconciliation of such non-GAAP measures to the comparable GAAP figures and for a discussion of additional risks and uncertainties that may affect the future results of Morgan Stanley.

This presentation, which is copyrighted by Morgan Stanley and may not be duplicated or reproduced without our consent, is not an offer to buy or sell any security or instrument.

I'll now turn the call over to Chairman and Chief Executive Office James Gorman.

James Gorman

Good morning, everyone. Thank you, Kathleen. As we begin another year, I'd like to share my thoughts on the current state of Morgan Stanley, discuss our progress against last year's priorities and share our plans for 2015. During my comments, I'll be referencing a presentation that you can find on the Investor Relations section of our website.

For the past five years this management team has worked hard to the following: One, to put the trouble for the financial crisis clearly in the rear review mirror; Two, to reposition our firm to benefit from our world class and complimentary franchises in Institutional Securities, Wealth Management and Investment Management as shown on slide 3; And finally to lay out specific plans with clear signposts for investors to follow as we work towards sustained, higher returns. Each year we like to remind you of the key elements of the plan, mark those elements to market and refresh the plan for the coming year so investors can properly judge our absolute and relative performance.

Before I make my strategic comments, let me briefly touch on the quarter. Our final result this year reflect a number of idiosyncratic issues including tax benefits, compensation changes, FBA implementation and legal reserves.

In addition, the quarter reflects a difficult market in trading environment across the industry especially in October and the last few weeks of December. Our trading businesses in particular fixed income and commodity sales and trading were clearly not immune to the unfavorable market environment. While Q4 had several complicating elements, it was also an important quarter as we continue to put residual issues from the financial crisis behind us. In a few minutes, Ruth will take you through the quarter in much more detail.

Before doing so, let me begin with the mark-to-market for 2014 which you can now see on slide 4. 2014 was a year focused execution against the strategic plan we have previously articulated. In Wealth Management, we continue to improve our profit margin and are well on the way to delivering 22% to 25% margin by the end of 2015.

Fixed income and