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WELTH MANAGEMENT

(Wealth management is an investment advisory discipline that incorporates financial planning,


investment portfolio management and a number of aggregated financial services. High net worth
individuals, small business owners and families who desire the assistance of a credentialed
financial advisory specialist call upon wealth managers to coordinate retail banking, estate
planning, legal resources, tax professionals and investment management. Wealth managers can
be independent certified financial planners, MBAs, CFAs or any credentialed professional
money manager who works to enhance the income, growth and tax favored treatment of long-
term investors. One must already have accumulated a significant amount of wealth for wealth
management strategies to be effective.
Wealth management can be provided by large corporate entities, independent financial advisers
or multi-licensed portfolio managers whose services are designed to focus on high-net worth
customers. Large banks and large brokerage houses create segmentation marketing-strategies to
sell both proprietary and nonproprietary products and services to investors designated as
potential high net-worth customers. Independent wealth managers use their experience in estate
planning, risk management,and their affiliations with tax and legal specialists, to manage the
diverse holdings of high net worth clients. Banks and brokerage firms use advisory talent pools
to aggregate these same services.
"The fallout of the events of 2008 has produced a high level of skepticism and distrust among
investors, and they will demand greater transparency from their providers to understand what
they own, the value of their investments and associated risks"[citation needed]. For this reason wealth
managers must be prepared to respond to a greater need by clients to understand, access, and
communicate with advisers regarding their current relationship as well as the products and
services that may satisfy future needs. Moreover, advisors must have sufficient information,
from objective sources, regarding all products and services owned by their clients to answer
inquiries regarding performance and degree of risk-at the client, portfolio and individual security
levels.
Today wealth management advisors must have access to an objective content repository. This
repository must contain a current and readily available profile of the clients holdings.)

INTRODUCTION:-

Management is what a manager does "the statement given by Louis Allen has very broad
and meaningful meaning. Though we all know that 'Manage' is nothing but to forecast and
plan, to organize, to command, to co-ordinate and to control. The eminent writer and
management guru William Spriegal has given very valuable definition that 'Management is
that function of an enterprise which concern itself with the direction and control of the
various activities to attain business objectives. Management embraces all duties and
functions that pertain to the initiation of an enterprise; it's financing the establishment of all
major policies and the provisions under which the organization is to be run and the selection
of the principal officers'.
In the general view the word management is form with Manage + Men + 'T' where 'T'
stands for the factor time.
The term wealth management also now a days having very importance. So many Banking
companies are engaged in the business of wealth management. The premier insurance
industry is now booming because so many bankers are also adopting and playing safe in the
business of insurance the term called is Bancassurance. Now a days wealth Management
has very craze in the business world. In a survey it was found that India had 100,000
milliners day end of year 2006 is now grow up by 21% from a year earlier (Asia pacific
wealth report).
CONCEPT OF WEALTH MANAGEMENT: The term wealth management formed with two
words wealth & Management. The Meaning of Management we have already seen in the
steering introduction. The meaning of wealth is – Funds, Assets, investments and cash it
means the term wealth management deft with funds Asset, instrument, cash and any other
item of similar nature. While defining wealth Management we have to think in planned
manner. "Wealth Management is an all inclusive set of strategies that aims to grow,
manage, protect and distribute assets in a much planned systematic and integrated
manner. "
MIDDLE EAST & WEALTH MANAGEMENT : In this globalized era Middle East countries
have huge wealth management need. There are two types of wealth management
institutions. They are:-
(1) Private Banks

(2) Family Offices, engaged in the business of wealth management in Middle East. For our
information the wealth management institute (WMI), the first center of excellence for the
wealth management education in Asia was established in Singapore in the year 2003.
The wealth management Institute (WMI) is providing professionals for wealth management
with a nice combination of learning and practical training.
The aim of WMI is to establish Singapore as the Asian hub for wealth Management. Where
Pvt. Banks and Family Offices are discussing about the strategies to capture the wealth
management business in the Middle East. The global institutions are looking towards the
Middle East to grow their wealth management business and attracting the big business
houses by their attractive service providing facilities. Tapping in to the Middle East market
it is very crucial for private banks and private wealth managers, the entry and increasing
market share is not very easy task for them but they are fighting. The Middle East region
has become very highly competitive over the last five years. Local banks now competing
with international banks.
WEALTH MANAGEMENT RANGE: - The range of wealth management can be expressed by
this exhibit chart.

CAREER
STUDENT START OF CAREER RETIREMENT
ESTABLISHED

* Deposit based comfort A/C * Comfort A/c with credit limit * Premium A/c * Premium A/c
* Credit cards * Gold Card * Platinum Card * Platinum Card
Liquidity
* Overnight money A/c * Overnight money A/c
Management
* Money Market & Fixed Income Fund * Money Market & Fixed Income Fund
(Cash Mgt)
* Near Money Market Fund * Near Money Market Fund
* ZINS Plus * ZINS Plus
* Special Investments

Wealth * Top portfolio * Top portfolio * Top portfolio


Formation * Flagship portfolio * Flagship portfolio * Flagship portfolio
(Savings * Titan portfolio * Titan portfolio * Titan portfolio
Plans) * Capital formation benefit funds
* Absolute Return Portfolio
Wealth * Holding and Private Equities
Optimization * Modular Wealth Management
(Lump sum * Individual Wealth Management
Investment) * Premium Portfolio
* Titan Portfolio

WEALTH MANAGEMENT : INDIAN CONCERN :-


Some times people confuse asset management or financial management with the wealth
management. But wealth management has very broad area.
Position of India in Wealth Management :-
In the annual survey done by Cap Gemini, SA and Merrill Lynch it was found that ranks of
millionaires grew 6% in the previous year, because the number of richer people grew in
India & China where India is competing China. India & China posted the biggest gain in
millionaires advancing by 23% & 20% respectively.
When we are watching the world wide increase in number of millionaires the facts collected
by Cap Gemini, S.A. and Merrill Lynch survey report. India has 23% growth in the last
year. The biggest Asian economy China stands on second position with 20%, west Asia
16%, United States 4% and United Kingdom (UK) 2%.
So we can understand that there is more opportunities in the wealth management business
in Asia specially in India.
ICICI BANK & WEALTH MANAGEMENT :
In India ICICI bank and Axis-Bank are very well known banks in the field of wealth
management. ICICI Bank will float subsidiary for the purpose of WM activities in Canada &
other market even as ICICI has rolled out ICICI Group Global Private Clients for those with
net worth of $ 1 million or more. ICICI GCPC launched their business in Dubai very recently
in the month of April-08 and caught 2500 clients. They are going to add another 1000 high
network clients this year.
ICICI Bank is using the services of global players like Merrill Lynch, City group, and UBS for
catching the clients for Wealth Management business. ICICI Bank and its subsidiaries are
engaged in the development of various attractive products (services) for the clients with net
worth of $ 1 million.
The eyes of ICICI Group Global Pvt. Clients on the rising number of dollar millionaires at
present they are 100,000 in number in few year the number will definitely increase. India's
No.2 lender banker ICICI expects to sustain the 70% growth in its private wealth
management business. ICICI has 150,000 customers with investible surplus of at least Rs.
10 lakhs equity, real estate and private equity is driving the private banking business in
India. India has market of wealth management about $ 600 billion.
AXIS BANK & WEALTH MANAGEMENT
One of India's leading private sector banker Axis bank also combined with Banque Privee
Edmond de Rothschild Europe based wealth management expertise institution & is going to
make new standard for the NRI's wealth management.
The LCF Rothschild group has based its reputation in the area of wealth management on its
big banking experience. Actually the institution is engaged in the task of providing financial
advise to the Europe's leading families, Government and various corporations for the last '7'
generations.
The Axis Bank 5th largest bank by market capitalization in India provides payroll services to
over 12000 corporates across 2.8 million salary accounts. The market capitalization of Axis
Bank was 235 million in the last year 2007 is engaged in the business of wealth
management, with its international presence in Dubai, Singapore Hong Kong, Shanghai and
so on.
SERVICES PROVIDED BY WEALTH MANAGEMENT INSTITUTIONS :-
(1) Custodian Services:-
(A) Securities Safekeeping
(B) Income collection from Securities
(C) Settlement of Securities trades as directed
(D) Payment of fund when directed
(E) Timely settlement delivery
(2) Trust Services:-
(A) Charitable Trust
(B) Revocable Trust
(C) Irrevocable life Insurance Trust
(D) Special Need Trust
(E) Institutional Trust
(3) Retirement Plan Services:
(A) IRA's Custodian Or Trustee
(B) Defined Benefit Plans
(C) Defined Contribution Plans
ADVANTAGES: The following are the advantages of wealth management concept.
1) Helpful In Tax Planning : The wealth management professional always shows the
good path to the customers and provide the service of tax planning. How to minimize the
tax and save more money?

2) Helpful In Selection of Investment Strategy: Another advantage from the customer


point of view is with the help of WM Professional the customer can easily know the
investment strategy and analyze risk and return.

3) Helpful In Estate Management: With the help of wealth management professional we


can also manage our estate. Estate management is a task to provide objective
administration of our funds tailored to aim in responsible distribution and protection of our
overall estate.

4) Helpful in forward looking: We can say planning, that recognizes as our estate grows
and changes occurs we require some team of professionals who help us in future planning.

5) Helpful for Indian Economy: Banks which are engaged in business of WM earning
revenues from the foreign countries i.e. outsourcing for economy
LIMITATIONS
1. WM Reduces The Scope Of Management: Though we all know that management has
existence at all levels of life and society but the term wealth management only related with
the higher level means rich people, and is not having any plans and provisions for poor and
lower and middle level of society.
2. Chances of Fraud: Another demerit or limitation of the WM concept is it is not showing
the actual position. The customer doesn't know about the things going on with using his
wealth and there may be chances of forgery and fraud with customers.
3. Actual Picture VS Inflation: What is the actual position of market we don't know
because every thing is done by some WM professionals. So we can not assume our position
in the market that also results in inflation because economy is unknown about the actual
state. There may be chance that the customers are in risk but they are showing the false
return and vice-versa.
CONCLUSIONS:

After studying the overall concept of wealth management we can say that it has various
aspects some are favorable and friendly for the Indian economy and some are very
dangerous for the Indian economy. The customers have to beware and they have to make
SWOT analysis before choosing the wealth management option. At present Indian Economy
is facing a lot of trouble by increasing inflation by 11.05% and hike in fuel prices in the
Indian as well as international market. As per Indian concept wealth management can not
success in India. But if Indian financial institutions are engaged and choosing the WM
business in foreign countries, most probably middle-east countries, it may be some relief for
the downward moving Indian economy.
Reference:
Business Standard (News Paper). Delhi.
Economic Times (News Paper). Delhi
Financial Express (News Paper). Delhi
Deccan Chronicle (News Paper). Hyderabad
Business World (Magazine). Delhi
Business Economy (Magazine). Delhi
Economic Political Weekly
www.axisbank.com
www.sbi.co
www.icici.com
www.pnb.com

Notwithstanding recessionary fears, the wealth management space in India [ Images ] is likely to
see robust hiring this year as the sector is expected to witness a strong growth momentum,
thanks to the increasing confidence level among investors.
"The Indian Wealth Management space has evolved and most high net-worth individuals (HNIs)
in India today have begun to appreciate the value of a professional approach to wealth
management," Vikas Agnihotri Vikas Agnihotri, chief executive officer, Vikas Agnihotri said.

Agnihotri added, "We have aggressive growth plans and are looking at increasing our
relationship and advisory team significantly during the course of this year".

Echoing similar views, D K Aggarwal, managing director, SMC Wealth Management Services
told PTI, "We have robust recruitment plans ahead. We plan to double our wealth management
headcount in the next one year."

We have recruited around 70 people and plan to hire 100 more in the next one year's time. We
plan to double our wealth management headcount to 200 in the next 12 months," he said.
SMC Wealth Management has regional offices in Bangalore, Kolkata [ Images ], Mumbai [
Images ] and Delhi [ Images ] and plans to set up eight more offices in tier II cities in the next 10-
12 months.

Giving reasons for high growth potential for the wealth management sector Agnihotri said,
"world economy is recovering from credit crisis and we have more positive news trickling in
these days. While we are still far away from a recovery, a sense of optimism is returning to
financial markets".

Asia has been growing at a faster pace than the rest of the world and it should continue to lead
on the way to recovery as well. Within Asia, China and India have been and will continue to be
the strongest drivers of growth, he added.

According to market experts, wealth management business in India will see growth and a fair bit
of consolidation. The firms that survive will have to differentiate themselves.

Product innovations, better service, efficient use of technology and trained manpower will be
key differentiators in the wealth management business going forward.

SMC Wealth Management's Aggarwal further added things are changing now a days and
confidence is coming back among investors. Both foreign institutional investors and domestic
institutional investors are investing in equities.

Besides, for India the outlook looks promising as it is a consumption driven economy, besides
agriculture, on which over two-third of population is dependent is booming.

According to a report by investment banking firm Barclays Capital "China and India continue to
be viewed as the most attractive markets in Asia, both in terms of potential for business
expansion and expected revenue growth rate."

The wealth management solution.

Link to this page


<a href="http://w w w .thefreelibrary.com/The+w ealth
So the question is no longer one of whether CPAs in significant numbers will offer financial services The
examples and perspective in this article or section may not represent a worldwide view of the subject.
Please [ improve this article] or discuss the issue on the talk page. to their clients, but rather one of how
they will do it.

Fortunately, this is one area where we can follow the lead of successful financial advisers, who have
been moving increasingly in the direction of wealth management as a model for providing financial
services. Our research has found that the overwhelming majority of surveyed financial advisers--86.2
percent--believe that wealth management will be the dominant business model of the future.

We can also follow the lead of affluent investors, who likewise are clear about wanting the kind of
comprehensive solutions that wealth management provides. Given the complexity that goes along with
wealth and the sheer number of financial options to consider, these high-networth individuals are ever
more interested in streamlining their financial lives. Rather than going to a different professional for
every financial product and service they need, they can go to a single individual--the wealth manager--
and obtain them all from one source.

One piece of research highlights this best. One study of 778 affluent investors found a direct correlation
Noun 1. direct correlation - a correlation in which large values of one variable are associated with large
values of the other and small with small; the correlation coefficient is between 0 and +1
positive correlation between client satisfaction and the number of services they are sold. As you can
see from Exhibit 3, the level of satisfaction among those investors sold only one service was just 39.9
percent. In a sharp contrast, those sold three or more services reported a satisfaction level of 96.1
percent.

Wealth management as we define it is an integrated process for helping clients manage their wealth. It
usually involves a diverse range of services, depending on the needs of each investor, but may well
include investment management, financial planning Financial planning

Evaluating the investing and financing options available to a firm. Planning includes attempting to make
optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial
plan, and then comparing future performance against , retirement, estate planning Estate Planning

The overall planning of a person's wealth, including the preparation of a will and the planning of taxes
after the individual's death.

Notes:
Contrary to popular belief, estate planning involves much more than preparing a will, and it is not only for
the , tax planning Tax planning

Devising strategies throughout the year in order to minimize tax liability, for example, by choosing a tax
filing status that is most beneficial to the taxpayer. , asset protection and cash flow and debt
management. And it is based on a long-term Long-term

Three or more years. In the context of accounting, more than 1 year.

long-term

1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of
time. Compare short-term. consultative relationship with the client.

For most CPAs, providing this range of services means a significant shift from simply offering traditional
accounting services. But for those who are successful in transforming their accounting practices into
wealth management practices, there are also significant benefits:

* Wealth management complements the existing expertise of CPAs and leverages the knowledge about
your clients' lives that you already have.
* Its holistic approach holistic approach A term used in alternative health for a philosophical approach to
health care, in which the entire Pt is evaluated and treated. See Alternative medicine, Holistic medicine.
enables the wealth manager to formulate formulate /for·mu·late/ (for´mu-lat)
1. to state in the form of a formula.

2. to prepare in accordance with a prescribed or specified method. better solutions to clients' financial
challenges.

* The comprehensive nature of wealth management offers you the ability to readily differentiate
differentiate /dif·fer·en·ti·ate/ (dif?er-en´she-at)
1. to distinguish, on the basis of differences.

2. to develop specialized form, character, or function differing from that surrounding it or from the
original. yourself from your traditional competition--other CPAs offering only accounting services.

* Because of its consultative nature, wealth management results in deeper client relationships, which
lead in turn to increased profitability and more client referrals.

How do we know that wealth management really delivers these benefits? Financial advisers again offer
us a clear indication of the success of the wealth management model. In our studies, financial advisers
generally break out into three groups, according to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3. how they conduct business.

1. Product specialists. These are financial advisers who focus on a product niche niche: see ecology.

niche

Smallest unit of a habitat that is occupied by an organism. A habitat niche is the physical space occupied
by the organism; an ecological niche is the role the organism plays in the community of organisms found
in the that might feature products such as managed accounts, stocks or fixed-income alternatives. This
group corresponds to CPAs who offer only traditional accounting services.

2. Investment generalists. These financial advisers provide a wide range of investment products, but do
not have a more comprehensive financial planning orientation. This group is analogous
analogous /anal·o·gous/ (ah-nal´ah-gus) resembling or similar in some respects, as in function or
appearance, but not in origin or development.

a·nal·o·gous
adj. to CPAs who offer financial services, but who do so within the traditional sales model, and not as
part of a consultative process.

3. Wealth managers. These financial advisers take a holistic Holistic


A practice of medicine that focuses on the whole patient, and addresses the social, emotional, and
spiritual needs of a patient as well as their physical treatment.

Mentioned in: Aromatherapy, Stress Reduction, Traditional Chinese Medicine , comprehensive approach
to their clients' financial lives that results in integrated solutions. Because of the breadth of this
approach, it also offers the wealth manager the opportunity to cross-sell a wide range of products and
services to each client as appropriate.

Which financial advisers enjoy the most success? One study examined the specific results of each
business model for 2001, finding significant differences. As Exhibit 4 shows, annual production dropped
for both the product specialists (down 9.4 percent) and the investment generalists (down 51.8 percent).

Only the wealth managers saw an increase in annual production (9.3 percent). Given that the study was
conducted during a volatile With regard to computer memory, it means "temporary" and not "highly
changeable," which is the usual meaning of the word. See volatile memory.

1. (programming) volatile - volatile variable.


2. (storage) volatile - See non-volatile storage. and largely down market, the results of the wealth
managers are even more impressive.
Exhibit 3. More Services Leads to Higher Client Satisfaction

Clients getting three or more financial services from their 96.1%


advisor
Clients getting two or more financial services from their 73.6%
advisor
Clinets getting on or more financial services from their 39.9%
advisor

N = 778 investors with a net worth of at least $5 million.


Source: Russ Alan Prince and Hannah Shaw Grove, Wealth
Management, 2003.

Note: Table made from bar graph.

Exhibit 4. Production by Business Model

Wealth Managers 9.3%


Product Specialists -9.4%
Investment generalists -51.8%

N = 4,106 registered representatives.

Source: Russ Alan Prince, Sunny Patpatia and Jordan S. Berlin, The
World of Registered Representatives, 2002.

The CPAs who choose wealth management will have a highly profitable
model for effectively meeting the needs of their best clients.

Note: Table made from bar graph.

Morgan Stanley is a global financial services provider headquartered in New York City, New
York, United States. It serves a diversified group of corporations, governments, financial
institutions, and individuals. Morgan Stanley also operates in 33 countries around the world with
600 offices, with an approximate employee workforce of 45,000.[1] The company reports US$779
billion as assets under its management[2]. It is headquartered in Midtown Manhattan, New York
City.[3]
The corporation, formed by J.P. Morgan & Co. employees Henry S. Morgan (grandson of J.P.
Morgan), Harold Stanley and others, came into existence on September 16, 1935. In its first year
the company operated with a 24% market share (US$1.1 billion) in public offerings and private
placements. The main areas of business for the firm today are Global Wealth Management,
Institutional Securities and Investment Management.
The company found itself in the midst of a management crisis in the late 1990s[4] that saw it lose
a lot of talent and competence[5] and ultimately saw the firing of its then CEO Philip Purcell in
2005.
On September 21, 2008, it was reported that the Federal Reserve allowed Morgan Stanley to
change its status from investment bank to bank holding company. On September 29, 2008, it was
announced that Mitsubishi UFJ Financial Group, Japan's largest bank, will take a stake of $9
billion in Morgan Stanley equity.[6] In the midst of the October 2008 stock market crash,
concerns over the completion of the Mitsubishi deal caused a dramatic fall in Morgan Stanley's
stock price to levels last seen in 1994. The stock grew considerably after Mitsubishi UFJ closed
the deal to buy 21% of Morgan Stanley on October 14, 2008.

Contents
[hide]
• 1 Overview
• 2 History
○ 2.1 Early years: 1935–1950
○ 2.2 Middle years: 1950–1990
○ 2.3 Recent years: 1991–present
• 3 Organization
○ 3.1 Institutional Securities
○ 3.2 Global Wealth Management Group
○ 3.3 Asset Management
• 4 Magazine and Popularity Rankings
• 5 Controversies and Lawsuits
○ 5.1 FINRA fine for e-mails
• 6 See also
• 7 References

[edit] Overview
Morgan Stanley is a global financial services firm that, through its subsidiaries and affiliates,
provides its products and services to customers, including corporations, governments, financial
institutions and individuals. The company operates in three business segments: Institutional
Securities, Global Wealth Management Group, and Asset Management.[7]
Morgan Stanley's office on Times Square

[edit] History
See also: JPMorgan Chase and J.P. Morgan & Co.

[edit] Early years: 1935–1950


Morgan Stanley can trace its roots in the history of J.P. Morgan & Co. Following the Glass-
Steagall Act, it became no longer possible for a corporation to have investment banking and
retail banking businesses under a single holding entity. J.P. Morgan & Co. chose the retail
banking business over the investment banking business. As a result, some of the employees of
J.P. Morgan & Co., most notably Henry S. Morgan and Harold Stanley, left J.P. Morgan & Co.
and joined some others from the Drexel partners to form Morgan Stanley. The firm formally
opened the doors for business on September 16, 1935, at Floor 19, 2 Wall Street, New York City.
Within its first year, it achieved 24% market share (US$1.1 billion) among public offerings. The
firm was involved with the distribution of 1938 US$100 million of debentures for the United
States Steel Corporation as the lead underwriter. The firm also obtained the distinction of being
the lead syndicate in the 1939 U.S. rail financing. The firm went through a major reorganization
in 1941 to allow for more activity in its securities business.[8]
[edit] Middle years: 1950–1990
The firm was led by Perry Hall, the last founder to lead Morgan Stanley, from 1951–1961.
During this period the firm co-managed the famous World Bank's US$50 million triple-A-rated
bonds offering of 1952. The firm, in this period, also came up with the General Motor's US$300
million debt issue, US$231 million IBM stock offering, the US$250 million AT&T's debt
offering[9].
In 1962, Morgan Stanley credits itself with having created the first viable computer model for
financial analysis[10], thereby starting a new trend in the field of financial analysis. In 1967 it
established the Morgan & Cie, International in Paris in attempt to enter the European securities
market. It acquired Brooks, Harvey & Co., Inc. in 1967 and established a presence in the real
estate business. By 1971 the firm had established its Mergers & Acquisitions business along with
Sales & Trading. The sales and trading business is believed to be the brainchild of Bob
Baldwin[11]. In 1970 Morgan Stanley opened a representative office in Tokyo and formally
entered the Japanese markets. In 1975 Morgan Stanley established Morgan Stanley International
Inc. in London. The private wealth management department was added into the firm's business
units by 1977 when Morgan Stanley established Morgan Stanley Realty Inc. In the same year
Morgan Stanley merged with Shuman, Agnew & Co. Morgan Stanley lead the Apple common
stock IPO on December 12, 1980. The firm entered the Prime Brokerage business in 1984. In
1986, Morgan Stanley Group, Inc., was publicly listed on the New York Stock Exchange. By
1990 Morgan Stanley had its regional offices in Frankfurt, Hong Kong, Luxembourg,
Melbourne, Milan, Sydney and Zürich and had regional headquarters in London and Tokyo.
[edit] Recent years: 1991–present
Historical logo used by Morgan Stanley in the early 2000s

In 1996, Morgan Stanley acquired Van Kampen American Capital. On February 5, 1997, the
company merged with Dean Witter Reynolds, and Discover & Co. the spun-off financial services
business of Sears Roebuck. The merged company was briefly known as "Morgan Stanley Dean
Witter Discover & Co." until 1998 when it was known as "Morgan Stanley Dean Witter & Co."
until late 2001. To foster brand recognition and marketing the Dean Witter name was dropped
and the firm became "Morgan Stanley". Morgan Stanley acquired AB Asesores of Spain and
entered India in a joint venture with JM Financials in 1999.
In 2001, Morgan Stanley lost thirteen employees in the September 11, 2001 attacks, but 2687
were successfully evacuated by Security Director Rick Rescorla, who was one of the thirteen
lost; after the disaster, the surviving employees moved to temporary headquarters in the vicinity.
In 2005, it moved 2,300 of its employees back to lower Manhattan, at that time the largest such
move [12].
In 2004, Morgan Stanley co-managed the Google IPO which is the largest internet IPO in U.S.
history. In the same year Morgan Stanley acquired the Canary Wharf Group. On December 19,
2006, after reporting 4th quarter earnings, Morgan Stanley announced the spin-off of its
Discover Card unit. In order to cope up with the write-downs during the Subprime mortgage
crisis, Morgan Stanley announced on December 19, 2007 that it would receive a US$5 billion
capital infusion from the China Investment Corporation in exchange for securities that would be
convertible to 9.9% of its shares in 2010.[13]
In August 2008, Morgan Stanley was contracted by the United States Treasury to advise the
government on potential rescue strategies for Fannie Mae and Freddie Mac [14].
On September 17, 2008, the British evening-news analysis program Newsnight reported that
Morgan Stanley was facing difficulties after a 42% slide in its share price. CEO John J. Mack
wrote in a memo to staff "we're in the midst of a market controlled by fear and rumours and
short-sellers are driving our stock down." The company was said to explore merger possibilities
with CITIC, Wachovia, HSBC, Banco Santander and Nomura.[15]
On September 22, 2008, the last two major unregulated investment banks in the US, Morgan
Stanley and Goldman Sachs, both announced that they would become traditional bank holding
companies regulated by the Federal Reserve, bringing an end to the era of investment banking on
Wall Street. [16] The Federal Reserve's approval of their bid to become banks ends the ascendancy
of the securities firms, 75 years after Congress separated them from deposit-taking lenders, and
caps weeks of chaos that sent Lehman Brothers Holdings Inc. into bankruptcy and led to the
rushed sale of Merrill Lynch & Co. to Bank of America Corp. [17]
Morgan Stanley purchased Smith Barney from Citigroup and the new company is operating
under the name Morgan Stanley Smith Barney.

[edit] Organization
Morgan Stanley splits its businesses into three core business units. These follow below.
[edit] Institutional Securities
Institutional Securities has been the most profitable business segment[18] for Morgan Stanley in
recent times. This business segment provides institutions with services such as capital raising and
financial advisory services including mergers and acquisitions advisory, restructurings, real
estate and project finance, and corporate lending. The segment also encompasses the Equities
and the Fixed Income divisions of the firm.
[edit] Global Wealth Management Group
Global Wealth Management Group provides brokerage and investment advisory services. As of
2008 Q1 this segment has reported an annual increase of 12 percent in the pre-tax income[19].
This segment provides financial and wealth planning services to its clients who are mainly high
net worth individuals and hedge funds.
[edit] Asset Management
Asset Management provides global asset management products and services in equity, fixed
income, alternative investments and private equity to institutional and retail clients through third-
party retail distribution channels, intermediaries and Morgan Stanley's institutional distribution
channel. Morgan Stanley's asset management activities are principally conducted under the
Morgan Stanley and Van Kampen brands. It provides asset management products and services to
institutional investors worldwide, including pension plans, corporations, private funds, non-profit
organizations, foundations, endowments, governmental agencies, insurance companies and
banks.

[edit] Magazine and Popularity Rankings


• Morgan Stanley was named one of the 100 Best Companies for Working
Mothers in 2004 by Working Mothers magazine.
• Family Digest magazine named Morgan Stanley one of the "Best Companies
for African Americans" in June 2004
• Essence magazine named Morgan Stanley as one of the "30 Great Places to
Work" in May 2004
• Asian Enterprise magazine named Morgan Stanley as one of the "Top
Companies for Asian Americans" in April 2004
• Hispanic magazine selected Morgan Stanley as one of the "100 Companies
Providing the Most Opportunities to Hispanics" in February 2004
• Morgan Stanley is listed in The Times Top 100 Graduate Employers, only
recently dropping out of the top 40
• The Times listed Morgan Stanley 5th in its 20 Best Big Companies to Work
For 2006 list[20]
• Great Place to Work Institute Japan in 2007 ranked Morgan Stanley as the
second best corporation to work in Japan, based on the opinions of the
employees and the corporate culture[21]

[edit] Controversies and Lawsuits


In 2003, Morgan Stanley agreed to pay billions of dollars in order to settle its portion of various
legal actions and investigations brought by Eliott Spitzer, the Attorney General of New York, the
National Association of Securities Dealers (Now FINRA), the United States Securities and
Exchange Commission, (SEC) and a number of state securities regulators, relating to fraud that
was allegedly perpetrated upon retail investors by a dozen of the largest investment banking
securities brokerage firms.
On July 12, 2004, Morgan Stanley settled a sex discrimination suit brought by the Equal
Employment Opportunity Commission for $54 million.[citation needed]
On January 12, 2005, The New York Stock Exchange imposed a $19 million fine on Morgan
Stanley for alleged regulatory and supervisory lapses.[citation needed]
On May 16, 2005, a Florida jury found that Morgan Stanley did in fact fail to give adequate
information to Ronald Perelman about Sunbeam thereby defrauding him and causing damages to
him of $604 million. In addition, punitive damages were added for total damages of $1.450
billion. This verdict was directed by the judge as a sanction against Morgan Stanley after the
firm's attorneys infuriated the court by failing and refusing to produce documents, and falsely
telling the court that certain documents did not exist.[citation needed] On March 21, 2007, the ruling
was overturned and Morgan Stanley was no longer required to pay the $1.57 billion verdict. [22].
On March 2, 2006, Morgan Stanley settled a class action lawsuit filed in California by both
current and former Morgan Stanley employees for unfair labor practices instituted to those in the
financial advisor training program. Employees of the program had claimed the firm expected
trainees to clock overtime hours without additional pay, and handle various administrative
expenses as a result of their expected duties. A $42.5 million settlement was reached, though
Morgan Stanley admits no fault in the settlement.[23]
On September 25, 2009, Citigroup Inc. filed a federal lawsuit against Morgan Stanley, claiming
its rival failed to pay $245 million due under a credit default swap agreement. The breach-of-
contract lawsuit was filed today in Manhattan federal court and seeks unspecified damages. [24]
[edit] FINRA fine for e-mails
On September 27, 2007, FINRA announced a $12.5 million settlement with Morgan Stanley to
resolve charges that the firm's former affiliate, Morgan Stanley DW, Inc. (MSDW), failed on
numerous occasions to provide e-mails to claimants in arbitration proceedings as well as to
regulators - while representing that the destruction of the firm's email servers in the September
11, 2001 terrorist attacks on New York's World Trade Center resulted in the loss of all pre-9/11
e-mail. In fact, the firm had millions of pre-9/11 e-mails that had been restored to the firm's
active e-mail system using back-up tapes that had been stored in another location.[25] Customers
who had lost their arbitration cases against Morgan Stanley DW Inc. because of their inability to
obtain the emails to demonstrate Morgan Stanley's misconduct will each receive a token amount
of money as a result of the settlement.
[edit] See also
Companies
portal

• Discover Card
• Morgan Stanley Capital International (MSCI)
• Van Kampen Funds
• Metalmark Capital, formerly Morgan Stanley Capital Partners

[edit] References
1. ^ "Morgan Stanley in United States". Morgan Stanley Website.
http://www.morganstanley.com/about/offices/usa.html. Retrieved 2008-03-
22.
2. ^ "Company Information". Morgan Stanley Website.
http://www.morganstanley.com/about/company/index.html. Retrieved 2008-
03-22.
3. ^ "Contact Us." Morgan Stanley. Retrieved on August 28, 2009.
4. ^ "Lame Duck Purcell". Forbes Website.
http://www.forbes.com/2005/06/13/morgan-stanley-purcell-quit-
cx_lm_0613quit.html?boxes=custom. Retrieved 2008-03-22.
5. ^ "Morgan Stanley Exodus Continues as 8 Traders Leave". New York Times
Online Edition of April 21, 2005.
http://www.nytimes.com/2005/04/21/business/21wall.html. Retrieved 2008-
03-22.
6. ^ "Mitsubishi UFJ Financial Group to Invest $9 Billion in Morgan Stanley".
http://www.morganstanley.com/about/press/articles/6962.html. Retrieved
2008-10-02.
7. ^ "Google Finance - Morgan Stanley Summary". Google Finance.
http://finance.google.com/finance?q=ms. Retrieved 2007-12-19.
8. ^ "Company History". Morgan Stanley Website.
http://www.morganstanley.com/about/company/history.html. Retrieved 2008-
03-22.
9. ^ "Company History". Morgan Stanley Website.
http://www.morganstanley.com/about/company/history.html. Retrieved 2008-
03-22.
10.^ "Company History". Morgan Stanley Website.
http://www.morganstanley.com/about/company/history.html. Retrieved 2008-
06-24.
11.^ "Company History". Morgan Stanley Website.
http://www.morganstanley.com/about/company/history.html. Retrieved 2008-
03-22.
12.^ "Surviving 9/11 gave former NHLer Rob Cimetta a new outlook on life".
http://www.lowermanhattan.info/news/morgan_stanley_to_move_52052.aspx.
Retrieved 2009-09-11.
13.^ "Morgan Stanley posts loss on writedown". Joe Bel Bruno, AP Business
Writer. http://biz.yahoo.com/ap/071219/earns_morgan_stanley.html.
Retrieved 2007-12-19.
14.^ "Morgan Stanley to Advise U.S. on Fannie and Freddie". Louise Story, The
New York Times.
http://www.nytimes.com/2008/08/06/business/06morgan.html?ref=business.
Retrieved 2008-08-11.
15.^ Morgan Stanley perplexes Wall Street as bank loses $20bn, The Times,
September 19, 2008
16.^ Wall Street in crisis: Last banks standing give up investment bank status,
The Guardian, September 22, 2008
17.^ Goldman, Morgan Stanley Bring Down Curtain on an Era, bloomberg,
September 22, 2008
18.^ "Morgan Stanley Reports First Quarter Results". Morgan Stanley Press
Release. http://www.morganstanley.com/about/ir/shareholder/1q2008.html.
Retrieved 2008-03-22.
19.^ "Morgan Stanley Reports First Quarter Results". Morgan Stanley Press
Release. http://www.morganstanley.com/about/ir/shareholder/1q2008.html.
Retrieved 2008-03-22.
20.^ "Times 20 Best Big Companies to Work For 2006 list". Times Online. 2004-
08-23. http://business.timesonline.co.uk/section/0,,20089,00.html. Retrieved
2007-02-08.
21.^ Great Place to Work Institute
22.^ Morgan Stanley has billionaire Perelman's $1.58 billion award reversed in
Sunbeam lawsuit - International Herald Tribune
23.^ Morgan Settles Suit on Overtime - Los Angeles Times
24.^ Citigroup Sues Morgan Stanley Over $250 Million CDO - Bloomberg
25.^ FINRA News Release
• Chernow, Ron (Copyright 1990) The House of Morgan
• Hibbard, J. (17 January 2005). Morgan Stanley: No stars—and lots of top tech
IPOs. In BusinessWeek, 56 – 58.
• John Mack Elected Chairman and CEO of Morgan Stanley
• Partnoy, Frank: F.I.A.S.C.O. - NY: Penguin Books, 1997.