Morgan Stanley added a record $148.1 billion in net new assets to its Wealth Management business during the second quarter of 2026, with slightly more than half of the inflows connected to initial public offerings involving clients in its Workplace channel.
The result represented a substantial increase from the $59.2 billion in net new assets generated during the same quarter of 2025. Morgan Stanley also recorded $39.1 billion in fee-based asset flows during the latest period.
Morgan Stanley’s Workplace channel provides financial services and benefits to employees of corporate clients. When participating companies complete IPOs, founders, executives, and employees may gain liquidity or receive publicly traded shares, creating opportunities for the firm to provide additional wealth management services.
These clients may require assistance with concentrated stock positions, portfolio diversification, tax planning, estate planning, lending, and other financial matters. By establishing relationships with private companies and their employees before an IPO, Morgan Stanley can retain those individuals as long-term wealth management clients after the company goes public.
The IPO-related inflows illustrate Morgan Stanley’s strategy of connecting its investment banking, workplace benefits and wealth management operations. The firm can initially work with a company through capital markets or employee stock-plan services before offering broader advice to executives and employees whose wealth increases following a public offering.
Morgan Stanley’s Wealth Management division generated record net revenues of $8.86 billion during the second quarter, increasing 14% from $7.76 billion a year earlier.
The business reported pre-tax income of approximately $2.7 billion and a pre-tax margin of 30.5%. Its performance was supported by higher asset management fees, robust client activity and increased net interest income.
Asset management revenue rose to $5.26 billion from $4.41 billion in the prior-year period. Morgan Stanley attributed the increase to higher market levels and the cumulative effect of continued fee-based asset inflows.
Transactional revenue totaled $1.17 billion, compared with $1.26 billion a year earlier. Excluding the impact of mark-to-market gains associated with certain employee deferred compensation programs in the prior-year quarter, transactional revenue increased due to higher levels of client activity across products.
Net interest income increased to $2.25 billion from $1.91 billion, primarily reflecting higher average sweep deposits and continued lending growth.
Wealth Management loans reached $195.7 billion at the end of the quarter, compared with $168.9 billion a year earlier. Fee-based client assets increased to approximately $3.02 trillion from $2.48 trillion.
Fee-based accounts are an important source of recurring revenue because clients generally pay advisory fees based on the value of assets held in those accounts.
Morgan Stanley’s broader financial results also benefited from stronger capital markets activity. The Institutional Securities division generated record net revenues of $11.04 billion, up from $7.64 billion during the second quarter of 2025.
Investment Banking revenue increased 58% to $2.44 billion. Equity underwriting revenue rose to $851 million from $500 million, supported by increased IPOs, follow-on offerings and convertible transactions.
Advisory revenue climbed to $798 million from $508 million, reflecting an increase in completed mergers and acquisitions, particularly in the Americas.
Fixed-income underwriting revenue increased to $788 million from $532 million as corporate clients pursued additional capital-raising and strategic transactions.
Morgan Stanley’s Equities business generated record net revenues of $6.3 billion, representing a 69% year-over-year increase. The firm reported strong performance across businesses and geographic regions, with notable strength in Asia.
Fixed Income revenue rose 13% to $2.46 billion, driven partly by stronger results in corporate credit and continued lending growth in the securitized products business.
Across the company, Morgan Stanley reported record quarterly net revenues of $21.35 billion, increasing 27% from $16.79 billion a year earlier.
Net income applicable to Morgan Stanley increased 58% to $5.58 billion, while diluted earnings per share rose 62% to a record $3.46.
The firm generated a return on tangible common equity of 26.6%, compared with 18.2% in the prior-year quarter. Its expense efficiency ratio improved to 65% from 71%, demonstrating operating leverage as revenue grew faster than expenses.
Total client assets across Morgan Stanley’s Wealth Management and Investment Management businesses reached $10 trillion during the quarter.
Investment Management assets under management totaled approximately $2 trillion, up from $1.71 trillion a year earlier. The division reported $7.5 billion in positive long-term net flows and generated net revenues of $1.65 billion.
Morgan Stanley also repurchased $1.5 billion of common stock during the quarter. Its board reauthorized a multiyear common equity repurchase program of up to $20 billion beginning in the third quarter of 2026.
The board also increased the company’s quarterly dividend by $0.15 to $1.15 per share.
The record Wealth Management inflows demonstrate the potential value of Morgan Stanley’s integrated business model. By serving companies, employees and investors across different stages of an IPO, the firm can generate underwriting revenue while building relationships that may contribute to recurring wealth management revenue over time.
KEY QUOTE:
“Active markets and consistent execution across all three regions drove exceptional results for our Integrated Firm, delivering record revenues of over $21 billion and record EPS of $3.46. Excellent results in Institutional Securities were driven by our leading Equities franchise with continued momentum in Investment Banking and Fixed Income. Differentiated content from our Research teams continues to drive high levels of client engagement. Wealth Management added a record $148 billion in net new assets, with total client assets across Wealth and Investment Management reaching the $10 trillion milestone. The Integrated Firm is intensifying Morgan Stanley connectivity with clients globally and enhancing financial strength for shareholders. We continue to accrete capital, giving us incremental flexibility to invest in our core businesses while generating strong returns for shareholders.”
Ted Pick, Chairman and CEO of Morgan Stanley
