“Ten trillion in wealth and asset management dollars, that’s going to be coming,” Pick said in a CNBC interview at the World Economic Forum in Davos, Switzerland. “We’re going to get there and hit 20% returns. That’s it: 10 and 20. It will take some time, but I’m super bullish.”
Pick’s predecessor guided Morgan Stanley in the aftermath of the 2008 financial crisis that nearly capsized the investment bank. Gorman transformed the bank into a wealth management giant through a series of savvy acquisitions, while helping rehabilitate trading businesses for a new era on Wall Street.
The pivot to wealth management boosted Morgan Stanley’s valuation well beyond rivals including Goldman Sachs, but more recently concerns about growth in that business have stymied the stock. Shares of the bank are down 12% in the last year.
“Part of the reason the boss had so much success is he kind of guided the place to a durable narrative instead of the herky-jerky, unpredictable Morgan Stanley,” Pick said.
The firm’s “secret sauce” is in the combination of a leading investment bank with its wealth management operations, he added.
“The name of the game is to sort of balance realistic expectations and build credibility, but have people understanding that we are highly confident of both of these pieces to grow,” Pick said. “The ecosystem of being a leading wealth manager, banking individuals not institutions, and then also covering them as an investment bank or hedging the risk as a trading house, that is unique.”
What may help matters this year is an expected rebound in corporate mergers and related activities after more than a year of depressed volumes, Pick said. A backlog of deals has been building since before the Covid pandemic began in 2020, he said.
“There’s a ton of activity buzz,” Pick said. “I think once people start getting going, we’re going to see a bunch of it.”
The U.S. economy is “probably past peak inflation,” and it’s “not inconceivable” that the Federal Reserve will be forced to cut rates faster than anticipated because of weakening data, Pick added.