Good morning. Welcome to Morgan Stanley's third quarter 2024 earnings call. On behalf of Morgan Stanley, I will begin the call with the following information and disclaimers. This call is being recorded. During today's presentation, we will refer to our earnings release and financial supplement, copies of which are available at morganstanley.com. Today's presentation may include forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially. Morgan Stanley does not undertake to update the forward-looking statements in this discussion. Please refer to our notices regarding forward-looking statements and non-GAAP measures that appear in the earnings release. This presentation may not be duplicated or reproduced without our consent. I will now turn the call over to Chief Executive Officer, Ted Pick. Good morning, and thank you for joining us. In the third quarter, Morgan Stanley delivered strong revenues of $15.4 billion, $3 billion of net income, and a 17.5% return on tangible. The results reflect top-line growth across our businesses and demonstrate operating leverage. Year-to-date results reflect the firm's ability to generate consistent quarterly performance, $15 billion of revenues, sequential EPS of $2.02, $1.82, and $1.88, and year-to-date returns on tangible of 18%. Across the firm, we advanced toward our strategic goals while continuing to invest in growth. We are delivering on asset aggregation by leveraging our unique platform and scale in Wealth and Investment Management. In the first nine months, we achieved $200 billion of organic growth. It's worth noting that over the last year, total client assets are up almost $1.4 trillion. Total client assets across Wealth and Investment Management have now reached $7.6 trillion on the road to $10 trillion. Our strategic investments across the integrated investment bank are reflected through share gains in our institutional franchise. The breadth and depth of our global team, working seamlessly across all three regions, was evident through the summer and post Labor Day, as we help clients navigate volatility against economic and policy uncertainty. As a whole, the integrated firm is achieving operating leverage with our year-to-date efficiency ratio, improving by approximately 300 basis points to 72%. We have achieved this while continuing to thoughtfully invest across business and infrastructure priorities. Institutional and individual clients are engaged, and we are well-positioned to capture opportunities against different market condition backdrops. Strong fee-based flows in wealth and the strong performance in Institutional Securities speak to clients seeking Morgan Stanley's advice. Improved underwriting markets, combined with increasing participation among financial sponsors and corporates across Investment Banking, support a constructive outlook. A broadening equity market and evolving interest rate policy are favorable backdrops for our markets businesses. Continued individual client focus on tax customization strategies are a tailwind for our Parametric business inside investment management. Now, with three quarters of 2024 on the board, we are striking a cadence that we will execute against. Our team is unified across the four pillars of strategy, culture, financial strength, and growth. Morgan Stanley's strategy is to raise, manage, and allocate capital for institutions and individuals. We will continue to execute on this strategy with a culture of rigor, humility, and partnership, and with high levels of capital and liquidity, Morgan Stanley will continue to execute on a plan of durable growth across our integrated firm. Sharon will now take us through the quarter. Nice job, SY. Thank you, and good morning. The firm produced revenues of $15.4 billion in the third quarter. Our EPS was $1.88, and our ROTCE was 17.5%. Results in the third quarter show the inherent strengths of our business model and our ability to grow revenues while also driving profitability. The firm's year-to-date efficiency ratio was 72%. In addition to strong revenue growth, efficiency gains are the result of disciplined prioritization of our controllable spend. An ongoing review of our real estate footprint, as well as lower litigation and consulting spend, contributed to this year's operating leverage while maintaining strong infrastructure to support ongoing growth. Now to the businesses. Institutional Securities revenues were $6.8 billion. Notwithstanding Advisory and Equity underwriting markets remaining below historical averages, the segment's revenues represented a near record third quarter. Performance accelerated towards the end of the quarter and was driven by the benefits of scale and the global reach of our integrated investment bank. Activity outside the U.S. drove the segment's outperformance relative to historical averages. Our global footprint positioned us well to capture share. As risk events around the world drove activity, including the Bank of Japan's monetary policy changes, shifting expectations around the size and the timing of the Fed's first rate cut, and China's announced stimulus, we supported our clients. I nvestment Banking revenues increased to $1.5 billion. The year-over-year improvement was driven by continued strength in underwriting, led by debt underwriting, and further aided by a pickup in Advisory revenues. Steady improvements in corporate and sponsor activity, as well as our investments in talent and client relationships, are yielding results. Advisory revenues of $546 million increased year over year on modestly higher completed M&A transactions in the quarter, with particular strength in EMEA. Large fee events from closed deals in EMEA, including those involving financial sponsors, supported the strongest quarter in over a decade for the region. Equity underwriting revenues were $362 million. While global market volumes remain well below historical trend lines, revenues were higher year over year, with a notable pickup of activity in Asia, driven by IPOs and follow-ons. Fixed Income underwriting revenues more than doubled versus the prior year to $555 million. Results were driven by strong non-investment grade issuance, supported by both refinancing and event-driven activity, as well as a record third quarter volumes in the investment grade market. Pipelines are healthy and diverse. We continue to believe we are in the early stages of a multiyear capital markets recovery. Corporate activity is gaining momentum, and the desire among sponsors to transact is steadily materializing, not only domestically, but also abroad. While we are cognizant of the broader Macroeconomic risks at play, we are well-positioned to deliver the integrated firm with a deliberate focus on comprehensive solutions for our global clients. Equity revenues were robust at $3 billion. The business navigated bouts of market volatility well and remained nimble as we supported clients. In particular, performance in the Americas and Asia was strong. Prime brokerage revenues were above historical averages, as client balances once again reached a new peak, driven by higher equity markets. Cash results improved versus the prior year, reflecting higher volumes across the regions. Derivative results were also up year over year, reflecting an increase in client activity, coupled with an improved trading environment in Asia, associated with China's announced stimulus in the final weeks of September. Fixed Income revenues were $2 billion, driven by strength in Macro, particularly rates, largely offset by results in Commodities that were stronger in the prior year. Results reflect solid performance in EMEA and Asia, as well as a coordinated global effort to support clients through periods of volatility. Macro revenues increased versus the prior year, attributed to higher client engagement as our rates business navigated the markets well amid shifting expectations around the size and the timing of the Fed's first rate cut. Micro results were roughly flat year over year. Results in Commodities declined compared to the strong prior year, which benefited from elevated volatility in energy markets. Turning to ISG lending and provisions. In the quarter, ISG provisions were $68 million, driven by portfolio growth, partially offset by an improved outlook. Net charge-offs were $100 million in the commercial real estate and corporate loans. Turning to Wealth Management. In the third quarter, the business produced a record revenue of $7.3 billion and record PBT, highlighting the model's strong operating leverage. Strength in Wealth Management reflects a combination of constructive markets and disciplined execution of our strategy. Client assets in Wealth Management reached $6 trillion. Fee-based flows were strong, demonstrating the power of our scaled and differentiated client acquisition funnel and the value of advice. Our multi-channel model is driving durable, long-term growth and profitability, benefiting from continued investments in our expanded offering and technology. Moving on to our business metrics. Pre-tax profits of $2.1 billion drove the margin to 28.3%. In the quarter, DCP negatively impacted the margin by approximately ninety basis points. Asset management revenues were $4.3 billion, up 18% year over year, driven by the cumulative impact of positive fee-based flows and higher markets. Fee-based flows in the quarter were robust at $36 billion, and year-to-date flows are on pace to exceed last year, supported by an ongoing contribution of assets from Advisor-Led brokerage accounts to fee-based accounts. Clients are diversifying fee-based accounts to include Fixed Income and alternative products. Fee-based assets now stand at $2.3 trillion. Net new assets were $64 billion, bringing year-to-date net new assets to $195 billion, which represents 5% annualized growth of beginning period assets. Net new assets in the quarter were supported by our Advisor-Led and Workplace channels, with a notable contribution from new clients in the Advisor-Led channel. Transactional revenues were $1.1 billion, and excluding the impact of DCP, were up 10% year over year. Overall, higher levels of client activity supported results. Loan growth was $4 billion for the second consecutive quarter, driven by mortgages. Total deposits increased sequentially to $358 billion. While average sweeps were down slightly, the recent stabilization, particularly, we've seen recent signs of stabilization, particularly as the Fed began cutting rates. This is encouraging. Net interest income was $1.8 billion. Looking ahead to the fourth quarter, we would expect NII to be modestly down from the third quarter results, largely on the back of lower rate expectations, consistent with the forward curve. We are committed to continuing to execute as the opportunity in front of us remains significant. We currently touch 19 million relationships, 1.3 million more than last year. Our expanded offering includes unique market access for high net worth clients across a broad range of alternative products, and more recently, robust private market services, which continues to attract demand. We are investing in our intellectual capital, unique products, and an integrated infrastructure to help our advisors serve their clients. Turning to I nvestment Management. Revenues of $1.5 billion increased 9% compared to the prior year. Results reflect higher asset management and related fees, which increased 5% year over year, driven by higher average AUM. Long-term net flows were approximately $7 billion. Inflows were primarily driven by continued demand in alternatives and solutions, and were further supported by our Fixed Income strategies. Since the acquisition of Eaton Vance within Alternatives and Solutions, Parametric customized portfolios have been a consistent source of strength. Our multiyear investments into Investment Management's partnership with Wealth Management includes initiatives around advisor education on our tax-efficient product capabilities. This has helped drive steady demand originating from our own Wealth Management clients, as well as the broader retail base. Liquidity and Overlay Services had inflows of $9.3 billion, led by our Parametric overlay strategies. Performance-based income and other revenues were $71 million. Results supported gains in infrastructure and real estate. MSIM's total AUM now stands at $1.6 trillion. Our investments in customization and alternatives are showing returns, demonstrated by positive long-term flows this quarter. We continue to invest in secular growth products in order to meet global client demand. Turning to the balance sheet. Total spot assets grew to $1.3 trillion. Standardized RWAs increased sequentially to $490 billion as we actively supported clients. We accreted approximately $2 billion of common Tier 1 capital. Our standardized CET1 ratio stands at 15.1%. We continue to deliver on our commitment to the dividend, which we raised to $0.925 per quarter in this quarter, and we bought back $750 million of common stock during the quarter. Our year-to-date results serve as hard evidence that we are executing on the opportunity set, benefiting from being global and diversified with the resources to invest in growth. Across Wealth and Investment Management, we reached $7.6 trillion of total client assets. Expanding markets and increased client engagement should further support asset growth as we progress toward $10 trillion in client assets. With that, we will now open the line up to questions. We are now ready to take in questions. To get in the queue, you may press star and the number one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press star and the number two on your touchtone telephone. You are allowed to ask one question and one follow-up, then we'll move to the next person in the queue. Please stand by while we compile the Q&A roster. We'll take our first question from Steven Chubak with Wolfe Research. Hi, good morning. Hey, good morning, Steve. Good morning, Steve. Ted. Hey, Sharon. How are you both doing? I wanted to start off with just a question on op leverage. You know, you noted that the management team has been very focused on driving more efficiency. We're definitely seeing that on the ISG side, 75% incremental margins. Even in Wealth, you're delivering 35% incremental margins. Just wanted to gauge the sustainability of some of those higher marginal margins, just given some of the efforts you cited on the efficiency side, while continuing to invest for growth. Certainly. Thank you for the question, and thank you for noting the progress. We have been really focused on this over the course of the year, and I'd say that it's not the intention has not been to be short-sighted, but rather to take a very long-term lens as we think about efficiency. Over the course of this spring, we began to look not only at one-year budgets, but really two to three-year outlooks, not just about revenues, but also understanding where are the efficiencies that we have to gain, and where can we consolidate certain investments in order to make room for what would be investments in growth? I highlighted occupancy because that's one that's very notable in the SEC disclosures. You'll see that over the course of a year-to-date to year-to-date basis, that line item has really only increased about $11 million. And we've made a lot of room to invest in optimization of the space, but also investments of space. You think about data centers, you think about new buildings, you think about new technology and new places that you think need to be used for occupancy. So there is a way that we're thinking about self-funding. Same goes for a decline in professional services. Some of that was related to... Remember, we were going through many years of integration, and while we stopped disclosing on an integration basis, there were still places that we thought that we could augment what we were looking at from a professional service basis and where we were thinking about long-term gains. On the other side of that, you've seen increases in places like BC&E, because we have been in a position where we've been supporting our clients. We're also making space, investing in the infrastructure as we think about the growth that we have going forward. Some of that just has to do with cyber resilience, thing that you would expect us to do as we grow the business going forward. But we're also looking at places where we're investing for FAs, new products, new technology that can give them space to go and prosecute new clients, which you see in our net new assets, of course, the course of the quarter. Broadly, as you think about risk and controls, you need to make sure that you have all of the right, you know, like I've said, infrastructure, really, the foundation and the building blocks, so that when you have growth, you're able to support it on a go-forward basis. We've been looking at it from both sides, Steve, and it is a multi-year process, and we would continue to do that, not just in this business cycle and this budget cycle, but as we go forward over multiple years. No, thanks for all that perspective, Sharon. Maybe just for a quick follow-up on the wealth business. The KPIs were quite strong across the board, clearly reflects very strong momentum in the third quarter, especially in September. Just wanted to better understand what if there were any idiosyncratic factors that maybe drove some of that strength. Inevitably, when you see that type of momentum, it begs the question as to how durable or sustainable some of those KPIs might be, and especially focused on just the growth in sweep deposits, which was certainly a nice surprise. Yeah, you know, specifically, I'd say actually, all the KPIs and all the underlying is strong. Sweeps being one that I called out as the deposit trends are certainly encouraging, especially since the Fed began to cut rates. We've seen that over the back end of September, and even as we look into the beginning of the fourth quarter on a relative basis in terms of expectations. So that has been positive. The underlying for me on all of the asset growth, both on NNA as well as fee-based assets, there's not one particular driver, but rather you've seen the advice-based side really picking up. You've seen clients and FAs engage. There continues to be investments into markets on a monthly level from brokerage, from brokerage sweeps, which you didn't see last year. So needless to say, the markets are improving. You're seeing more momentum in the economy, uncertainties are lifting, and retail clients are engaged, both from seeking advice but also coming to the platform as new clients, which I think is a particularly good trend to watch. Our next question comes from the line of Ebrahim Poonawala with Bank of America. Ebrahim. Hey, good morning, Ted. I guess maybe just first question on capital priorities. Just talk to us in terms of how you're thinking about the capital ratio today, in context of we are still waiting for the Basel reproposal. But more importantly, I think the history of the last ten years has been excellent capital allocation, organic or inorganic. As you're looking at the world today, Ted, where are you deploying capital? Where are the best investment opportunities? Is it in markets? Is it in wealth? Is it in international? Would love to get your perspective. Thanks for the question. As you know, we're at 15.1 CET1. The new number is 13.5, so our buffer is 160 basis points. We like that buffer. It gives us room to operate. You saw that we had some- ... our risk-weighted asset increase, but we still managed to keep the ratios at 15% plus. So there's a story here, which is to continue to prize best-in-class financial strength along the lines of capital liquidity, but also to lean into the businesses as the market opportunity affords. We did that clearly in both businesses. You saw it in the investment bank, where we gained share across the primary and both markets businesses, but you also saw it in Wealth Management and some of the technology spend that Sharon described. In the sort of forced hierarchy of what we would wish to do at any given moment around capital allocation, as we've said before, it's the dividend first. That is sacrosanct, and we continue to grow it. Second year, because of the secular growth and where we are in the cycle, as Sharon just described, there is a good cause to be investing in all three segments: Wealth Management, Investment Management, and the investment bank. And to do so, across the world, we're clearly seeing our rates of equitization increasing in places like Japan and India and on the continent. So having a global franchise and investing in that, we think is existentially important. And then the buyback is opportunistic. We'll be buying back $3 billion plus this year, as that's an ongoing lever that we're gonna pull. Of course, the Basel uncertainty likely will last through the election, and we have our points of advocacy that are aligned with the industry, but also those things that matter very much to Morgan Stanley, specifically. We're going to continue to make our case concertedly, respectfully, and we'll see how it plays out after the election. But as it stands now, 160 basis points of a buffer on CET1, 5.5% SLR. We are investing in the business. We're achieving operating leverage. So these things are always a movable feast, but we are keeping a very close eye on it, and we're happy with how we're optimizing the allocation. Got it. And one quick follow-up for you, Sharon, on sweep deposits, NII, all that good stuff. Just as we think about rate cuts, clients kind of maybe serving a trigger event for clients to reallocate how they invest. Is the NII, give or take, close to a bottom because of a certain level of sort of... I think you've talked in the past about cash balances that clients have maintained. Are we close to that? And if we get QT, maybe before the end of the year, could those deposit balances potentially have one less headwind and, as a result, grow, looking into next year, despite rate cuts? Sure. So let me take the last part of your question first, just to be clear. QT hasn't really been a driver for us. I'd say that's more for a commercial bank. So in either direction, I don't think it has to do with a decline or an increase. So I'd put that aside because our deposit base is just slightly different. When we look at where we've been and the types of language that we've used historically, I'd say that just to put it in context, the rate environment has changed. It's changed since the second quarter, and I'd say it's changed pretty materially. So we don't have control, as we all know, in terms of where interest rates are going. What I can speak to is where we are from a deposit level, and as I said, the trends that we've seen are extremely encouraging if you think about where we've come from and where we are over the course of the last couple of weeks, especially where, when the Fed ever since the Fed has cut interest rates. The near-term guidance that I gave is that we will likely be modestly down over the course on a quarter-over-quarter basis. And where we will be as we look into 2025, I think we will reevaluate based on where sweeps are, but more importantly, on the forward is likely where interest rates are, which will be a function of: What does the Fed do in November? What does it do in December? And what is the path for 25 when we sit at the beginning of January? But I just want to put a little bit of perspective around the conversations that we've had about sweeps and NII over the course of the last couple of years. I understand that it's been a very important topic for investors, especially when you think about sweeps in particular. But sweeps, as I said, have been, to some degree, stabilizing. And when you look at NII for Morgan Stanley on a relative basis, think about where we were last year in the third quarter. The delta between NII this quarter and last quarter is $175 million. We make $100 million a day in this business every single day. And so I think that we really need to begin to think about: What is the model? What are we thinking about, and how are we executing in the model? Asset management fee-based revenues, that increase this year is double the decline of NII. So we just need to gain a bit of perspective now that we see where sweeps are, that the markets are coming back, and that we continue to see asset management fees rise, and that is the durable revenue and what we expect to see from this business model as we move forward. Our next question comes from Glenn Schorr with Evercore. Hey, Glenn. Hi. Hello there. Okay, so with RWA up 10%, I had assumed that it was trading and client-led with PB balances at record highs. And it comes with a VaR that's actually down a little bit. So I'm curious, do you think that ebbs and flows with just the environment, or is there some of your capital plan continue to feed this great client franchise across markets? And I'll just ask the follow-up with it because I think it goes together better. With all of that, wealth hasn't now that you've made a lot of investments, wealth doesn't need a lot more capital infusion, if you will. Based on how you're going about your capital plan, do you envision any material shifts in the retail business mix? You know, we've gotten all very accustomed and used to a big percentage of this company being asset and Wealth Management. Thanks for both of those. Sure. Let me take them backwards, Glenn, just so I'll talk to wealth. Wealth sees a steady, you know, a very small but steady increase when you look back in history, associated with RWAs. And a lot of that is just has to do with the lending growth. And as we think about greater household penetration, greater usage of those products by FAs and offering that to our client base, that will probably that's kind of where you'll see that capital allocation as we move forward. When you think about ISG, though, and the RWAs that's been implemented in the business there, if you look at the loans and lending commitments, you'll see that where we've actually seen a lot of the growth is really on corporates. And a lot of that underlying is corporates and all of the FSL, so the fund-secured lending. That is inherent to the integrated investment bank and the integrated firm. We've said over the course of the last two years that we expect this to be a Investment Banking-led recovery. We've also said, and we've invested in individuals, and when you think about in talent in terms of the investment bank more broadly, that's where you're seeing the RWAs being put to work, and that's actually also where you're seeing the results, right? That's where you're seeing an increase in DCM, an increase in different parts of the balance of Fixed Income coming from more lending, durable financing revenue. So it's very much alongside what we're thinking about the stabilization and the durability of the investment bank, rather than something that's necessarily more episodic. Of course, it will ebb and flow as you see, deals and transactions and that, environment for those corporates, but that's how I would think about it broadly. What I'd add to that is, what is important too, as you look through the metrics, Glenn, is that the revenues in the investment bank are up 20% year over year, and roughly flat down 2% sequentially. But in that same period, the trading VaR, the value at risk, across the investment bank is running flattish. And that is... in fact, it's slightly down. So we were able to put up some real operating leverage without taking up the underlying measured risk in the business, which speaks to sort of the type of durable revenue model that Sharon described across our integrated investment bank. Our next question comes from Devin Ryan with Citizens JMP. Hi, Devin. Hey, good morning, Ted and Sharon. First question on NII in Wealth. Obviously, a lot goes into that, but it would be great if you could maybe speak to some of the second-order impacts of lower interest rates that we should be thinking about, and maybe some that are a little bit less obvious, like changes in margin utilization or securities lending or securities-based loans, or even customer engagement with certain types of products or, or really anything else I'm missing there. Just would love to kind of get some more flavor around the implications and how you guys are thinking about those second-order impacts on NII as you look out over the next year or so. Yeah, we continue. As I mentioned, this is the second quarter that we've seen loan growth. I wouldn't—you know, we've seen stronger quarters. So this is just the beginning. Basically, there's been a steady increase in mortgages, even though there's a rate hike cycle where it is and the rates were higher, and over time, as rates would come down, you'd expect to begin to see refinancing activity, which will spur lending. You'll also likely see, as you get into tax cycles with asset levels where they are, an increase also in SBL. So there's that, those lending products have been relatively muted versus the historical basis, and it wouldn't be surprising to begin to see more and more of that activity going forward. Okay. Great. Thanks, Sharon. And then, just want to come back to the really nice quarter you put up in net new assets and wealth, and you touched on a notable contribution from new clients in Advisor-Led. And so I'm just curious if there's anything else you can highlight that supported that momentum with new clients, specifically, whether it's in new products or if there was programs internally that you're running to support that, because it sounds like, you know, it was a catalyst, and just curious if that could continue. Sure. So on, specifically on new clients, Devin, I'd remind you a conversation that Jed had when he spoke publicly recently, which was really about what we're doing on stock plan and different ways that we're introducing FAs to new clients. We call them, you know, human referrals. It's a place where you begin to think about if someone's calling, for example, into a call center or they've come to a different event, and they'd like to actually be matched with a financial advisor. Remember, we're using technology, different parts of AI, and different ways to begin to appropriately match individuals with FAs we think will suit them. Those human referrals are double and over a hundred thousand year to date versus what you've seen in the past. So I think that that's a place where we've invested in technology. We understand now how to better match and understand individuals and their needs, and we're giving them an opportunity to see the value of advice going forward, and that's what you're seeing in those numbers in terms of the net new assets. So it's really bearing fruit in terms of the investments we've made. Our next question comes from Dan Fannon with Jefferies. Morning, Dan. Hey, good morning. I was hoping you could expand upon some of the strength of activity outside the U.S. You know, some of the events you cited seem, you know, country-specific, but can you talk to how you see the rest of the world, you know, participating in what you guys have said will be an Investment Banking recovery? And certainly, we know the U.S. is focused in terms of the, you know, potential cap markets recovery, but curious as how you think about the broader, you know, base outside the U.S. The integrated investment bank premise that we built over the last ten years and really intensified over the last five years was that it takes a real local commitment to have a global investment bank. We've made real investments on the continent, for example, in Iberia, in Italy, in France. We continue to be the largest presence, actually, as a tenancy matter in Canary Wharf, so in the UK, so our European commitment is real across both Investment Banking and increasingly in the markets business. That's in the investment bank, but also we have a thriving Investment Management business, LPs, who are well ensconced on the continent, and we're building that integrated capability with alternative solutions and the like. We have been strong, as you know, in Asia for really decades, and that I spoke to the power of a global Investment Banking institution, that when we had disruptive events Sharon alluded to in Tokyo and then in China in the last couple of months leading into this quarter, it was important that we have a leading Investment Banking and markets presence, both in Japan and in Hong Kong and Mainland. So, here, the seamless execution will pay off as cross-border M&A intensifies, as parts of the world outside of the US, where, of course, we have our concentrated bet as a regional matter, to the point you were asking, you see good growth in revenues in both, in Asia and in Europe. You saw year-over-year growth of almost 25% for the firm in EMEA, Europe, Middle East, Africa, and then 30% plus in Asia. That speaks to having a local presence, such that when the Investment Banking cycle really kicks in, and companies wish to engage in strategic activity, which includes, obviously, getting bigger or making a sale, and potentially go public locally, that we're gonna have the kind of presence to transact. So running the global investment bank is going to pay for years to come. And I would add, by the way, that an important part, culturally, of what we've done at Morgan Stanley for many years, which is bearing fruit, is to mobilize some of our senior talent from one region to another, not just across businesses, but across regions, which is important when you have thirty of your eighty thousand people outside the United States, that they're familiar with our operations in places like India and Budapest. Great, that's helpful. And then just as a follow-up, within Investment Management, you know, longer term inflows are certainly a positive. But if we look at the backdrop, you know, markets are up significantly year to date. Revenues, you know, have moved modestly, but still have expenses. So as you think about the asset mix that's coming in the door that's skewed more towards lower fee, whether that's within Parametric or Fixed Income, how do you expect, or how do you plan on improving the overall profitability of that segment as you think about the longer term trends that are putting you know, more pressure on fees? I'll take that. So you're right to identify that there is a mix shift as we're seeing different types of flows. I'd also note, though, there are also investments being made when you think about just the expenses, to help make sure that we're there to service the clients in terms of where we're seeing the secular growth trends. So it's an asset story on Parametric. It's an asset story on alternatives. We're investing in both. Both of those are places we see secular growth trends, and we're making sure to be there with for our clients. Now, alternatives is going to be higher fees, just basic, you know, private credit, et cetera, will be higher fees than you might see in Parametric. That being said, I don't see it simply as a fee sort of game, but rather the greater the assets, the more opportunity and the more to be the leader in the space, and to continue to attract new capital to seek new opportunities. So overall, I see it more as a, as a strategy associated with asset building, aggregation, and being there to service our clients, but also making sure that we have the capital there to invest. So things like Parametric, you're gonna need to spend money on more market data. You're gonna need to build relationships with wealth.... and that's going to cost money on the margin in the short term, but it will give us the opportunity for growth as we move forward over the long term. Our next question comes from Brennan Hawken with UBS. Morning, Brennan. Hey, Ted, good morning. All right, so I'm willing to risk the wrath of Sharon here, and ask a question on NII. Well, I totally appreciate it's just a part of the wealth business, right? So totally get that, but I thought it was really encouraging to see the end-of-period deposit costs tick down pretty decently quarter over quarter. So maybe is that driven by the fact that you've seen a lot of those deposits shift into, like, the higher costs and therefore higher beta products? So, you know, would that be sustainable? And then, you know, when we're thinking about a combination of, you know, that de facto higher beta, the potential for reinvestment tailwinds in the securities book and loan growth, is it too optimistic to think that NII could grow next year? So thank you, Brennan. I appreciate that you do understand the business, and you do understand that there are multiple drivers of this business. I think what you're hitting on is that there are a lot of places that you can still see growth that is not specific only to the deposit mix. So yes, it's encouraging to see certain pieces. Now, of course, you also had a Fed rate cut in there, so that will continue to bring, you know, the cost of certain types of deposits. You think about the beta. The beta will really depend, like you alluded to, also on products. So things like a savings product will have a much higher beta than something like a sweeps product, which will have a much lower beta. They just... You know, they're two different products with two different purposes in terms of the dynamics of what they're used for. Now, on the forward, it will, of course, depend on the Fed rate path. There are so many changes that have taken place over the course of the last quarter that make it very difficult to say, well, where will the Fed be and where will be those investment opportunities? So where I would sort of point to is, there are three pieces that we've always talked about that will drive NII. Two of them are encouraging. That's the growth on the asset side in terms of where you're seeing us being able to actually deploy the capital, where you're seeing people ask for lending opportunities, et cetera. It's growing. It's encouraging. Sweeps, what we know and what we've seen, especially since the first rate cut, is also very encouraging, particularly as historically, if you look back, and I said this in the last quarter call, generally speaking, when you begin to see interest rate cuts, you do begin to see different parts of deposits rise. So again, an encouraging sign. Where will it be when you think about reinvestment and the rest of NII? That in and of itself is really the Fed, and, if we go back a quarter ago, no one, you know, it was a very low probability to see a fifty basis point rate cut, and lo and behold, we had one. So why don't we see where we are after the November and December meetings, and then restate kind of where we think we'll be over the course of the year, just from a rate perspective. But those three building blocks, you know what they are, and you know that the two that are under our control or that have to do sort of, I wouldn't say under our control, but rather have to do with what our clients are doing, I've told you what I'm seeing from our data, and it's all positive. Okay. Totally. That's, that's helpful. Thanks, Sharon. And then for the follow-up, maybe shifting gears a little bit, you, you spoke to sponsor engagement. You know, we've seen some sponsors actually start to hit the IPO market. You know, given your strength in ECM and the strong franchise you have there, what are you seeing on the IPO pipeline front, and how should we be thinking about that outlook into next year? As you know, the sponsors have roughly $1.3 trillion of dry powder. They have $3-$4 trillion of portfolio companies in the ground, by some measures, 10,000 companies in the ground. For the first time in close to 15 years there, the deployment is outpacing the fundraising. There is a need for that group to move, and they act as a liquidity source, but they also act as a competitive player to our traditional corporate community. I think much has been said about the barriers to entry to be a highly regulated Sarbox public company. I would take the view that there are a whole bunch of great companies that are owned privately that do want to make their way into the public markets. That currency allows them to make acquisitions, to set up long-term compensation plans and the like, to go global. So what I'd expect to see are larger companies going public, having been private for some time, reaching a level that makes them a tougher sale on the private front. There are private alternatives, but the going public phenomenon is not going away, and I made reference to this earlier. I think there is a going public phenomenon that will exist around the world, whether it's select countries doing privatizations, whether it's exciting companies that, for the first time, are reaching global benchmarks. So I think we're going to see the IPO market slowly work its way back, larger names coming to market, and then when they do, quite quickly needing the full service suite of a global investment bank. Needing the treasury capabilities, needing hedging services, needing the kind of advice that a mid- or large-cap mature company needs, and that, of course, on a global scale, is right in our sweet spot. So I'm bullish on IPOs and M&A coming back. It may take some time, and the size of the companies, when they come, will be likely larger, so there'll be slower unit volume than the sort of the heyday of post-COVID stimulus and quick listings. But I think these are going to be global, mature companies, which are going to very much need our advice. Our next question comes from Christian Bolu with Autonomous. Morning, Christian. Morning, Ted and Sharon. On Wealth Management, really nice to see solid loan growth in the last two quarters. Just thinking a little bit looking forward here, as rates come down, kind of how are you thinking about maybe longer-term growth? Do you think loan growth can maybe reaccelerate back to pre-COVID levels, where we were seeing 20+% growth per year, or is that business more mature today with less growth upside? No, I actually. Thank you for the question. I don't think that it's more mature with less upside. I actually think there's more upside to go when you think about the penetration of FAs using those products. So we used to be sort of in the low double digits in terms of that penetration. That's moved up to somewhere in the teens. But we do think that there's opportunity to surpass that higher. And if you look sort of at peers, even in similar kinds of channels, so not, you know, lending through a commercial bank, but more on the wealth side, those numbers are higher. So there's certainly opportunities there, Christian, so that's why I appreciate you asking the question. I wouldn't say it's not just on the mortgage side. That certainly can come back, but SBLs have been relatively flat, and it's not surprising. We've talked a lot about the uses of those lines, and especially if rates are low, thinking about how to use those lines to pay taxes, for example, and think about what you're doing from an efficiency perspective with your portfolio as an individual investor. Okay. Very helpful. Thanks. Maybe one more on deposits. Well, not only deposit, again, appreciate this is- ... maybe a smaller issue now and fading away. But how are you thinking about just the philosophy around deposit pricing within Wealth Management, you know, given some of the SEC scrutiny? And then, you know, maybe any data you can provide around how much of your sweep cash is in the Advisory related assets? Sure. So why don't we just... I'll take it to sort of, I guess, together, but answer it slightly backwards, which is we talked about different pricing changes, and last quarter, we also said that that was a small portion in terms of where the changes were going to be made. So it's small. It's in the run rate. You saw it over the course of the quarter, and it was in the results. When we think about deposit pricing, we take a number of factors into consideration, and one of the most important factors that we highlighted last quarter, and we've been looking at, even through this cutting cycle, are competitive dynamics and where competitive pricing is. So that's-- it's the market, and it's also competition. It's the need for deposits, and it's where that is on a relative value perspective. All of those things that include the customer as well. Our next question comes from Gerard Cassidy with RBC. Morning, Gerard. Hi, Ted. Hi, Sharon. Morning. In your prepared remarks, you guys talked about your Prime Brokerage revenues are historical, above historical averages as clients' balances reach new peaks. Can you share with us, how, how much of that is driven by just existing clients or also, you know, you're expanding, you know, your client base, where you're growing that as well? Can you compare the two areas of driving these numbers? I think the question is an interesting one because the barriers to entry to scaling a new asset manager are quite high, but we host, as you're aware, our cap intro conference every January down in Breakers. We've done that for decades and continue to draw enormous demand to try to get a slot because once you've made it, the platform economics of success and your ability to penetrate various distribution channels enables you to get big quite quickly. It's sort of tough to make it, but once you've made it, you can really scale into a large institution. By and large, though, the growth that we've seen across equities to hit the $3 billion mark over the last couple quarters, you've seen, has not been consuming additional VaR. It's just staying close to our clients. These results indicate that we've increased wallet with predominantly the existing base. We've done that around the world, and the leverage levels for a lot of these clients in the quant and platform space are actually running close to the typical range for that subgroup. So we've been able to interact with them in a productive way across, not just Prime Brokerage, but cash and derivatives too, and then importantly, across the markets business. So this is part of this integrated investment bank philosophy that-... You can have folks that are traditional players in one pocket moving across the asset spectrum, and the leadership in the markets business has done a great job facilitating that, not just across underliers, but as I mentioned in the past quarter, across regions. And to the extent that there are spin outs or others, we have a vibrant business now in the Middle East, too, in Abu Dhabi and in Scandinavia, in Copenhagen. Those are the two offices we recently opened, and I mention them because they are not just great possibles for Investment Banking and for our Investment Management business, but they're also very interesting for our markets business, too. Very helpful. Thank you. And then just as a quick follow-up, I always appreciate your guys' insights and others that really don't have big exposures to credit. And so you mentioned that you had charge-offs of $100 million in commercial real estate and corporate loans. Can you give us any color? Again, you're not a big lender like a JPMorgan or a Bank of America, so insights from folks like you, I think, are very helpful. Any color here? Sure. Those are largely provisioned for, and so I think what you've seen is that it's almost as though some of the credit changes have been working themselves through the market. If you look back over the course of the last two years, we've had a lot of conversations, Gerard, specifically talking about CRE. You've had some great questions as it relates to that space. You know, we saw that that was happening. We provisioned for it, and over time, you will see that likely come through on the other side as charge-offs, and that's kind of where we are at this point in the cycle. We'll take our next question from Mike Mayo with Wells Fargo. Good morning, Mike. Hey, good morning. Earlier, you talked about, you know, your tech efforts. And so Ted, as you think about AI, is Morgan Stanley a leader or a close follower? You wait for others to do it? And then more specifically, what's going on with your partnership with OpenAI? I see a quote here from Morgan Stanley. "OpenAI is perhaps the best example to date of empowering Morgan Stanley with the marriage of human advice and technology." And I think you're unique in using OpenAI. So any color you can provide would be great. Sure. I, I'll take it because we continue to do work with OpenAI. In terms of where we are overall on the technology side, Mike, you saw a lot of our products very early, say, almost ten years ago at this point in time, when we did our first tech expo, and we looked at tools that we were using AI and different types of machine learning, et cetera, to give our advisors tools to give them more time to prospect business. As it relates specifically to that partnership, that partnership is going extremely well. We continue to look at new platforms and new applications that we can use with them. And there are new places that we're using AI that we've launched and we've discussed over the course of the last two quarters or so. One is we obviously do have a tool where FAs can use and speak to our research portal, so to speak, and understand, and AI will basically read everything, and then can help you answer different questions associated with what's already been published in terms of that volume of data. In addition to that, as we've moved forward, we can have tools like Debrief, where an individual, of course, gaining permission in a meeting can use what they've heard in a meeting through AI, translate languages, et cetera, summarize, and then be able to send out emails as follow-ups based on the conversations had in those meetings with a draft. Obviously, you have human interaction after and a human overlay, but just gives you the bare bones, again, to save time for the advisors as we move forward. We're doing that across the institution in different pockets and spaces as part of the... If we think back to the efficiency work that we started this call with, there will be places where we can use AI to also think through efficiencies. So it's a balance of understanding where to invest and then how to use that to gain time back from a productivity standpoint as we move forward. I also like the question because it suggests that there are gonna be opportunities where being a fast follower is just fine, where you can take existing capability and make the digitization process easier on a straight cost effectiveness play. To Sharon's comments, where we are really digging in as a call it proprietary matter, is around the productive efficiency inside of Wealth Management. This entire we call it AI @ MS, as you know, AI at Morgan Stanley. The AI Morgan Stanley Assistant is just the first chapter of what we're gonna do across the financial advisor platform, specific to our own offering with clients, where we think we're going to have some real edge. You say it's the first chapter. I know this is looking forward, but what could be some other chapters as it relates to AI? At our place? Well, it's going to be a tool, at the very least, that is going to help inform FAs on what is relevant at any given moment, under any different, any given paradigm. They are gonna have access to information across a whole bunch of data sets... ongoing conversations and interactions that are gonna allow for crisper and more effective conversations with their clients. I think that will take some time to play out, but when you think about it, extraordinarily effective in terms of the interactions when there will be heightened proclivity to activity between the client and the FA. Whether it's around an exogenous event or a life event, for the FA to be well-equipped to know what types of products and services might be available down the road, is something that we think will be part of the embedded offering. We'll take our last questions from Saul Martinez with HSBC. Saul, good morning. Good morning. Good Good morning. Hey, you've had pretty, you know, sustained good fee-based asset flows, you know, for some time now, and maybe this quarter was a little bit outside. And Sharon, you mentioned the trends of, you know, Advisor-Led brokerage moving to fee-based, clients diversifying to alternatives and Fixed I ncome instruments or Fixed Income. Can you just comment on the extent to which you think these dynamics have legs, where we are in terms of these dynamics occurring, given, you know, the strength in asset prices and equities and rates coming down, and what that might mean for your flow expectations and for fee rates? Yeah, I actually really appreciate the question. I appreciate that you took note of the comments that I gave in the prepared remarks, which is what we've been focused on is really migration and understanding migration of assets. So we look at, you know, there's brokerage accounts and self-directed, and there's brokerage accounts when you think about on the advisor side. You have an advisor, but you also have a brokerage account, and not everything is in fee-based. The numbers from brokerage is, those numbers are increasing in terms of what's actually migrating into fee-based. And why I think that's important is we've always said that we would expect, oftentimes, the way you see net new assets come into the institution, they come in maybe under an advisor or not, but let's say you're in the advisor side. It comes into a brokerage account first. It doesn't go directly into fee-based. And so it's really the migration of assets coming in and then seeing that pick up, saying, "Oh, I understand that there's a value to advice, and let me now figure out where I'd like to put it and what type of fee-based wrapper, so to speak, that is going." Now, if I go back sort of ten years or so, it was really only in equities. That's where you saw most of those fee-based advice coming in. Now, that has changed. Over time, we began to talk about Fixed Income. Remember, that had to do some of... We would talk about fee degradation. We'd say, "It's not fee degradation, but it's mixed," and it was mixed into Fxed Income. Now, we're seeing that mixed also into alternatives. So that's what's interesting, is that there are more products also being offered under the fee-based wrapper that people can begin to think about. And as those products increase, and we have more products than others, we have more tools, more opportunities to people- for people to invest. We'll see more assets come in, there's more value to advice, and there are more places to put it in when you think about the fee-based offering. So I think that it has momentum, and as, as you know, those are the durable revenue streams that we expect to gain over time. Okay. That's, that's helpful. Thanks a lot. Thank you. There are no further questions at this time. Ladies and gentlemen, this concludes today's conference call. Thank you, everyone, for participating. You may now disconnect and have a great day.