“Ten trillion dollars will come from wealth and asset management dollars,” Beck said in an interview with CNBC at the World Economic Forum in Davos, Switzerland. “We'll get there and make 20% returns. That's it: 10 and 20. It's going to take some time, but I'm very optimistic.”
Beck's predecessor directed Morgan Stanley in the wake of the 2008 financial crisis that nearly turned the investment bank on its knees. Gorman transformed the bank into a wealth management giant through a series of smart acquisitions, while helping to rehabilitate the business for a new era on Wall Street.
A pivot into wealth management has boosted Morgan Stanley's valuation beyond rivals including Goldman Sachs, but recently concerns about growth in that business have hampered the stock. The bank's shares have fallen 12% in the past year.
“Part of the reason Big Boss was so successful was that he steered the place into a solid story rather than a jerky and unpredictable Morgan Stanley,” Beck said.
He added that the company's “secret sauce” was the combination of a leading investment bank and its wealth management operations.
“The name of the game is kind of balancing realistic expectations and building credibility, but making people understand that we're very confident in the growth of those two pieces,” Beck said. “The ecosystem of being a leading wealth manager, banking individuals rather than institutions, and then also covering them as an investment bank or hedging the risk as a trading house, is unique.”
What may help matters this year is an expected rebound in corporate mergers and related activities after more than a year of declining volumes, Beck said. The backlog of deals has been building since before the Covid pandemic began in 2020, he said.
“There's a lot of activity noise,” Beck said. “I think once people start moving, we'll see a bunch of things.”
Beck added that the US economy “may have passed peak inflation,” and it is not unlikely that the Federal Reserve will be forced to cut interest rates faster than expected due to weak data.
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