Morgan Stanley Boss Points to Wealth Management As ‘Stable Foundation’ in Congressional Grilling
At the hearing in front of House Financial Services Committee Chairwoman Rep. Maxine Waters, D-Calif., the CEOs of America’s largest banks said that they have downsized their operations, and Morgan Stanley’s James Gorman pointed to the firm’s wealth management business as a stabilizing force, according to news reports.
Waters wanted to know how the banks have streamlined their businesses following the 2008 financial crisis, ThinkAdvisor writes. Along with Gorman, Waters heard testimony from Citigroup’s Michael Corbat, JPMorgan Chase’s Jamie Dimon, Bank of America’s Brian Moynihan, State Street’s Ronald O’Hanley, Bank of New York Mellon’s Charles Scharf and Goldman Sachs’s David Solomon, according to the publication. While most of the CEOs talked about eliminating business lines, thereby making management of their firms tighter, Gorman specifically referenced Morgan Stanley’s wealth management division, saying that the company more than doubled its size since 2008, “giving the firm a stable foundation of support in any market environment,” according to ThinkAdvisor.
“By building complementary franchises in institutional securities, wealth management and investment management, we reshaped Morgan Stanley over the last decade to derive a greater share of revenues from relatively stable businesses,” Gorman said in his prepared testimony, according to the publication.
The CEOs seemed less clear on what their own ranks will look like in the near future, however. When Rep. Al Green, D-Texas, asked them whether the next CEOs of their firms would look any different, none raised a hand, according to Bloomberg.
“All white men and none appears to believe that your successor will be a female or a person of color,” Green said, according to the news service.
But when Green asked whether the banks are “likely to have a female or person of color within the next decade,” all but Dimon and Gorman raised their hands, Bloomberg writes.
Nonetheless, Mary Erdoes, JPMorgan’s head of asset and wealth management, and Marianne Lake, the company’s CFO, are both considered contenders to take over Dimon’s role when he steps down, according to the news service. And Morgan Stanley wealth management co-head Shelley O’Connor is among those being considered to take over from Gorman, Bloomberg writes.