(Reuters Breakingviews) - Morgan Stanley boss James Gorman has stolen a march on...
NEW YORK - Morgan Stanley boss James Gorman has stolen a march on David Solomon at Goldman Sachs. His $13 billion all-share deal to buy online brokerage E*Trade Financial gives Morgan Stanley more stable revenue, higher returns and cheaper funding – in short, just what Solomon’s strategy is designed to achieve.
Then there’s diversification. Gorman already had a head start after branching into wealth management over a decade ago. Last year, volatile trading income made up around one-third of Morgan Stanley’s total revenue, compared with more than 40% at Goldman. Taking E*Trade’s revenue into account, Morgan Stanley’s reliance on trading would have been around 30%.
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