Morgan Stanley’s (MS) Q2 2017 Earnings Call Notes

posted in: Earnings Call, Notes | 0

James Gorman – Chairman and Chief Executive Officer

Changes in regulations would boost growth

“now is the time to make some practical changes for the multitude of regulations. These changes would allow U.S. banks to be greater engines of economic growth…Let’s focus on some sensible changes, because we’ve now had eight years of experience and digest and see what worked and what didn’t. And the cumulative effect of a lot of these regulations in some cases end up if you will with a double counting”

Rate hikes will be beneficial

“as the major U.S. depository we have endured historically low interest rates for a very long time. Each move when hiring rates assuming a measured path should benefit our business.”

Human advisors are not that much more expensive than robo platforms. 

“If you look at the average basis points paid from the various robo platforms, they range in general like things from something like 20 to 40 basis points. If you look at the average basis points for a full service advisory like us, just divide our revenue into our assets including everything, you get somewhere in the 70s, low 70 basis points. So the value added of the financial buys and the institutions behind it and the research, the product offering, the new issued calendar you could argue is being putout there for 30 to 40 basis points. It’s not clear to me that, that is such an expensive gap that that’s going to lead to the cannibalization issues.”