Good morning. Welcome to Morgan Stanley's third quarter 2025 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 supplements, 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 Chairman and Chief Executive Officer Ted Pick. Thank you. Good you. Good morning and thank you for joining us. In the third quarter, Morgan Stanley generated record top and bottom line performance with revenues of $18.2 billion and EPS of $2.80. Robust returns on tangible of 23.5% reflect the operating leverage of the integrated firm. The capital markets flywheel is taking hold as the administration seeks to execute on its three-pronged strategy to reshape the economy with Fed rate cuts likely to continue into next year. Across public and private markets, institutional and retail clients are engaged, seeking trusted advice and global access from investment bankers, financial advisors, and market specialists. From the first quarter of 2024, a top priority for the team has continued to be the reaffirmation of Morgan Stanley's strategy to raise, manage, and allocate capital, and over time to execute on a higher plane when favorable capital markets environments permit. Our business model is activity-based, and while we cannot control the broader economic and market backdrop, the heart of the Morgan Stanley investment thesis remains our delivering earnings and returns durability alongside continued dividend growth through periods of uncertainty. This focus on maintaining earnings durability and driving earnings growth is governed by execution rigor inside the lanes of the priorities outlined in our annual strategy deck. The readout of sequential EPS results during this period underscores ownership of earnings growth and durability against different economic backdrops: 2.02, 1.82, 1.88, 2.22, 2.60, 2.13, and now 2.80. Morgan Stanley is well positioned in each of our businesses and is demonstrating consistent execution. Total client assets across wealth and investment management are up $1.3 trillion over the last year and have reached $8.9 trillion. In wealth, our scale and client reach continue to drive performance. Reported margins were a full 30%. We added $81 billion of net new assets and $42 billion in fee-based flows in the quarter. Investment management continues to scale capabilities with sustained leadership from Parametric. Across all three regions, our institutional securities business delivered outstanding results. Our equities business affirmed its number one position with a standout quarter. A rebound in the investment banking environment reopened the door to strategic M&A and renewed financing activity. The equity underwriting result was also industry-leading this quarter, which speaks to the power of our integrated investment bank. With respect to the bank regulatory capital framework, regulators are moving toward a more balanced approach, executing on their prudential oversight responsibilities and more leveling the competitive playing field where the largest, best-capitalized financial institutions can once again act as a primary engine to drive sustainable economic growth. Morgan Stanley specifically appreciates the Fed's recent reconsideration of our CCAR results, and we look forward to ongoing dialogue and transparency. Our excess CET1 capital stands at over 300 basis points. Periods of economic and geopolitical uncertainty were to be expected. As we transitioned from the post-pandemic period we called the end of the end of history to a period we now could call the continuation of history, a period in which the push and pull of industrial policy, national identity, and technological innovation will continue to be front of mind for our clients and stakeholders. Morgan Stanley will continue to capture opportunities around the world through cycles, staying close to our clients as they raise, manage, and allocate capital. We are actively investing in the integrated firm across wealth and investment management, institutional securities, and across our bank and infrastructure units. We are deploying capital and expanding capabilities through the wealth funnel and enhancing the global distribution of our asset management offerings. As macro uncertainty and enormous opportunity uncomfortably coexist, our 2025 year-to-date results demonstrate both the capability and the capacity to deliver earnings durability and generate operating leverage against shifting economic and geopolitical backdrops. Morgan Stanley's strategy remains consistent, and our durable earnings and capital strength are clear. The quarter's performance across wealth and investment management, alongside the strength across institutional securities in all three regions, underscores the proposition of the integrated firm. We are focused on generating strong returns for our shareholders and have real degrees of flexibility to pursue growth opportunities across our core businesses. We are committed to advancing through $10 trillion in total client assets and onto the next phase of Morgan Stanley's growth trajectory. As the firm celebrates its 90th anniversary, we are as ever focused on executing first-class business in a first-class way across the integrated firm for our clients, our shareholders, and our colleagues. Sharon will now take us through the quarter in greater detail. Thank you and good morning. The firm delivered exceptional results in the third quarter, underscoring the power of our global integrated firm and the scale of $8.9 trillion in total client assets. Performance was very strong across the businesses and regions, driving record revenues with a CVA of $2.80 and an ROTCE of 23.5%. The year-to-date efficiency ratio is 69%. The firm continues to demonstrate operating leverage while maintaining focus on longer-term investments. Our investments in workplace, E*TRADE, and our investment banking franchise are yielding results. Our early AI use cases, some live and some in pilot, are showing progress. These include the DevGen AI tool, which enhances developer efficiency by modernizing code, Parable, an interactive tool that quickly analyzes and summarizes data, and LeadIQ, our AI-powered lead distribution platform, focusing on matching workplace and self-directed relationships and facilitating engagement with our financial advisors. Together, these use cases are laying the foundation to drive productivity across the firm. Now to the businesses. Institutional Securities revenues were a standout at $8.5 billion, driving powerful operating leverage. While the Americas led the year-over-year growth, clients were active around the world. We are continuing to see attractive returns from steadily investing across the integrated investment bank. Themes around emerging technologies and renewed investor appetite in Asia contributed to the results. Investment banking activity has meaningfully improved after several years of muted volumes. Capital markets reopened and supported underwriting issuance across both debt and equity products. Specifically, market receptivity for IPOs encouraged both sponsor and founder-led companies to come to market. This, combined with strong credit metrics, set the stage for renewed strategic activity. Investment banking revenues increased to $2.1 billion, marking one of the strongest quarters in recent years. The year-over-year improvement was driven by broad-based strength, with underwriting results up over 50%. Advisory revenues increased year-over-year to $684 million, driven by higher completed activity. Equity underwriting revenues increased 80% year-over-year to $652 million, driven by IPO activity and further supported by strength across equity products and sectors. Activity picked up materially in September on the back of record-breaking post-Labor Day issuance in the Americas. Fixed income underwriting revenues were $772 million, driven by higher non-investment grade and investment grade loan issuance. As the M&A market showed signs of recovery, event-related lending commitments met receptive markets. Results were supported by higher flow activity as clients took advantage of refinancing opportunities. Secular themes and pent-up demand have supported an increase in activity across the integrated investment bank. Clients are increasingly turning to Morgan Stanley to navigate complexity, monetize opportunities, and deploy capital decisively. In the quarter, robust pipelines translated into announcements, and credit markets were resilient and open, conducive to activity. We continue to selectively hire bankers and product specialists as the integrated firm culture is attracting opportunities to deepen the coverage footprint. Our leading equities franchise generated $4.1 billion in revenue, propelled by broad-based performance across products and regions. Prime brokerage revenues drove results as average client balances and financing revenues reached new records. Cash results were strong, reflecting active client engagement and an increase in global market volumes compared to the prior year. Derivatives results were up year-over-year, driven by higher activity and regional strength in EMEA. Fixed income revenues were $2.2 billion. The business showed consistency, driven by strong client engagement across credit and commodities, partially offset by lower results in foreign exchange. Micro results increased year-over-year. Performance was driven by strength in securitized products, benefiting from robust securitization activity and historical growth in durable lending balances. Macro revenue declined versus the prior year. Volatility decreased in foreign exchange markets across developed market currencies, leading to reduced client activity and trading opportunities. Results in commodities finished the quarter with strength, increasing year-over-year, driven by our North American power and gas business, which included structured transactions during the period. In the quarter, ISG provisions were modest at $1 million, as a sequential improvement in the macroeconomic forecasts was offset by portfolio growth and individual assessments. Net charge-offs totaled $46 million, primarily driven by commercial real estate loans that had largely been provisioned for in prior quarters. Turning to Wealth Management, our franchise is growing with sustained momentum, reinforcing our industry-leading position. A record $7 trillion in total client assets, record revenues of over $8 billion, and continued operating leverage drove margins to 30%. Another quarter of strong net new assets and robust fee-based flows illustrate the power of the funnel and the scale of our client base, which spans over 20 million relationships. Assets that originated from workplace continue to migrate into our advisor-led channel as a result of the consistent investments we have made into our differentiated platform. We are not standing still. In the third quarter, we continue to invest, deepening our competitive moats in areas like our expanded collaboration with Carta in private markets and in digital assets through announced partnerships with Zero Hash. We continue to innovate, reinforcing our leadership in the industry and enhancing our ability to service our clients with unique capabilities. Moving to our business metrics, record revenues were $8.2 billion. The business continues to demonstrate operating leverage, with the reported margin expanding to 30.3%. DCP negatively impacted the margin by approximately 100 basis points this quarter. Asset management revenues were a record at $4.8 billion. Fee-based flows were exceptionally strong, exceeding $40 billion for the second consecutive quarter. Transactional revenues were $1.3 billion, and including the impact of DCP, were up 22% year-over-year. Throughout the quarter, retail clients were engaged across products, and self-directed activity was particularly strong. We launched Power eTrade Pro, which is a reflection of our investments to enhance our platform. These investments have helped support eTrade's transactional revenue, which is highly accretive to our margin. Bank lending balances rose $5 billion sequentially to $174 billion, reflecting our multi-year investments to meet the full portfolio needs of our growing client base. In the quarter, we deepened our client penetration with lending solutions, inclusive of securities-based lending and mortgages. Sequentially, total end-period deposits grew to $398 billion, and net interest income increased to $2 billion. The growth in NII was driven by the impact of our market environment and the cumulative loan growth. Looking ahead to the fourth quarter, we expect to see a modest sequential gain in NII. Of course, the rate environment, trajectory of loan growth, and deposit mix will all come into play. Finally, in the third quarter, we delivered net new assets of $81 billion, a testament to the depth and breadth of our diversified platform. All three channels contributed to our asset growth. The reopening of the IPO market also supported results, further evidence that our workplace channel serves as a powerful asset acquisition tool. This quarter, the business demonstrated exactly what it is built to do. With over 20 million relationships and $7 trillion in total client assets, our scale and connectivity set us apart, positioning us to deliver. Turning to investment management, the business continues to perform well. We are seeing momentum for secular demand in our highly sought-after Parametric solutions and expanding our global reach in fixed income. Our investments have supported our growth to a record $1.8 trillion in total AUM and further positioned the business for the opportunities ahead. Long-term net inflows were $16.5 billion in the quarter. Over half these inflows were driven by Parametric and further supported by ongoing strength in fixed income. Parametric inflows were inclusive of a large partnership with a third-party investment advisor seeking greater tax efficiency for its clients. Liquidity and overlay services had inflows of $24.8 billion, driven by demand for our liquidity strategies. Revenues of $1.7 billion increased 13% compared to the prior year. The increase was driven by higher asset management and related fees on the back of higher average AUM. Performance-based income and other revenues were $117 million, supported by gains in infrastructure, private equity, and real estate. Turning to the balance sheet, total spot assets grew to $1.4 trillion. Standardized RWAs increased sequentially to $536 billion as we actively supported clients. Exposures rose intra-quarter on greater levels of activity and reduced into quarter end as we syndicated risk. Our standardized CET1 ratio stands at 15.2%. We opportunistically bought back $1.1 billion of common stock in the quarter. Our quarterly tax rate was 23.6%, excluding $50 million of net discrete tax benefits. We continue to expect our fourth quarter tax rate will be approximately 24%. The firm is operating with momentum across all segments. We enter the fourth quarter from a position of strength, with a combined $8.9 trillion in total client assets, an engaged client base, healthy pipelines, and global reach. We remain focused on continuing to invest in our business as we look ahead. 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 touch-tone 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 touch-tone telephone. You're 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 Dan Fannon with Jefferies. Please go ahead. Morning, Dan. Morning. Morning. Ted, I was hoping you could just talk about the environment. You've been quite bullish all year, obviously a great quarter. Can you talk about the sustainability of these trends, maybe the context of the backlog in investment banking, the diversity, and how that compares to maybe prior periods? Yes. The question is the right setup. Whether we are entering a golden age in investment banking remains to be seen, but it has been now several years of chatter around green shoots, and now the flywheel is taking hold. It's happening across industry groups. It's happening across regions. It's happening against a generally more favorable regulatory backdrop. It's happening at a time where there is de-globalization and re-globalization, depending on where you are and how you're looking at it, and obviously the need to defuse the cost of endogenous AI. That sets up for a very interesting environment for strategics who now will compete for product with sponsors in each region and in each major industry. We've been spending considerable time and capital on building our investment banking core, and the fruits of that are seen in both the equity and debt underwriting number and an advisory number that continues to pick up. To what you're alluding to, Dan, the pipeline looks very good across all three regions. We are optimistic. Of course, the world is an uncertain place, and there could be pauses depending on how geopolitics feel. Generally speaking, the investment banking product category over the next couple of years should be generally up and to the right. Great. Thank you. That's helpful. Sharon, I was hoping you could expand upon your comments around just the NNA growth within the wealth channel. You talked about workplace and the IPO market being a contributor. If there's a way to contextualize that a bit more and also just talk about the other channels in terms of the momentum there as well. Thank you. Absolutely, Dan. Thank you for the question. All the channels are strong. Self-directed, we've been increasing our marketing and business development. You can see that. Our advisory is also strong. We have new clients, existing clients, both coming in. We're attracting assets held away. We're also bringing in new clients, and that's a lot of the tools that we've been giving to our advisors. As it relates to workplace, that's probably the most exciting part. I think we're just scratching the surface of what we've seen in workplace. It's bringing in assets not just in NNA, but also directly into fee-based flows. People are, you know, we're seeing momentum as you have IPOs come to market. People are bringing their assets to Morgan Stanley. They're dropping into their self-directed accounts, yes, but they're also moving it directly into the advisor-led accounts. That's been a large part of the story. I think you and I have talked about it, Dan. Historically, we've asked about, we've given a $300 billion number about that workplace migration, and we've said that we've seen about $60 billion of migration per year. We're already three quarters into it, and we're exceeding those numbers from a full-year basis. Workplace has been a contributor to net new assets, to fee-based flows, and channel migration. Our next question comes from Ibrahim Punawala with Bank of America. Your line is now open. Hey, good morning. Hi, Ibrahim. Hey, Ted. I had a question on the pre-tax margin hitting 30%. I know you kind of removed all the pluses and the signs when you took over as CEO, but it's coming up a lot more frequently in our conversations with investors. When we look beyond one, do you think you've achieved a point where the 30% pre-tax margin is sustainable? I'm not saying you're changing your guidance, but I'm just wondering when you think about the outlook and all the productivity improvements, etc., is there risk that the 30% is drifting higher or moving lower in terms of when we think about the medium-term outlook? Thanks for your question. It's incredibly important that we continue to understand that the investment dollars go into that wealth business to broaden and deepen the funnel flywheel that Sharon just described, whether it is putting more dollars in the pro product in E*TRADE where we're also focused on upping deposits, whether it's investing in adjacent digital asset product, whether it's in deepening our relationships at the corporate workplace center, or it's ultimately in our financial advisors. We're going to continue to put investment dollars into the system. Now, whether that with continued operating leverage gets us to a number that is higher than 30% over time, let's see how it goes. Right now, it was important for everyone to see that we had a reported number in a reasonably friendly environment that was, I believe, 30.3%. That is an output, not an input. The continued input is our investment dollars to drive PVT growth. What is most exciting about what the wealth team has done is to drive revenues and to drive overall growth in each piece of the funnel. Got it. I guess just in terms of you mentioned a friendly environment, there's so much discussion around whether there's an AI bubble. We are in the late 1990s in terms of where we are in the cycle. Just talk to us when you think about both sides of the business, investment banking, and as you're getting insights from how your clients on the wealth side are thinking about things. Just how do you handicap that risk of where we might be in the cycle and what has history taught us of what that implies for your revenue or growth outlook? When we think about our use of AI and what we're seeing is there are many places that one can use AI. It's not just around efficiency, but it's also productivity, both on the expense line and on the revenue line. I tried to note three different examples at the beginning opening comments, and they were purposeful because they all represent different ways that one can begin to use AI from a full firm perspective. One is just going through code and being able to work faster, make sure that we can be more efficient with our time, that coders can be more efficient as they go through lines of code that they're able to see and rewrite. That's one example that we can all kind of see across different firms, and I think different institutions have talked about it. Then you have things that are specific to Morgan Stanley, which might be around LeadIQ, and that's very revenue-driven, right? How do you give more time to an advisor? How do you make sure that you give more matches that produce better results? That's how we've been using all sorts of technology going forward. Then you have things that you can see across all sectors. Parable is something that we've been doing really in finance, looking at our data, piloting it through, and finding ways to summarize key data that other companies can also take advantage of. I think if you take a step back and your question is, what does it mean? There's a lot of ways to use this technology. It's extremely powerful. This is another place where I think we really are just scratching the surface of what it can do. We'll move to our next question from Christian Bolu with Autonomous. Your line is now open. Morning, Christian. Morning, Christian. Morning, Ted and Sharon. I wanted to follow up on Wealth Management and your outlook for that business. Just given your leverage to private markets and technology sector through Solium and your Carta partnership, I'd imagine you should be an outside beneficiary of the wealth creation around sort of the AI CapEx cycle. I'm curious how you see that, and then how does that influence your outlook for sort of 5- 7% organic growth over time? When we think about private markets, we are obviously the largest provider in all the alternative space for the wealth management businesses, just given our overall aggregate size. It's about $250 billion of client assets. On the forward, I think what's important here is that there's an education process. We don't look at it as something you're not going to necessarily flip the switch. There are places that we can continue to see asset growth and asset accumulation. We're offering new products to our clients, such as evergreen products and products that allow for lower denomination size. This is a journey, and it will take time as we think about the education process and reweighting or rebasing individuals' portfolios. It is absolutely a growth opportunity, but again, one that will take time. Thank you. On equities, really nice growth there, and it's been a consistent pattern of share gains in that business for a while now. Just remind us again, kind of what's driving share gains there, and where do you see further opportunities going forward? As it relates to equities, it's an incredible business. We've done an incredible amount of investing in our platform, our people, and also our global regions. Equities more broadly do speak to what we've talked about when we talk about durable share-based gains for ISG. This is a durable business where you have increases in prime brokerage balances. We have obviously spent the time looking at our end clients and looking at the end balances. This is yet another place where you do see technology investment dollars going in. You see that on the derivative side, and you see that on some of the cash-based businesses and what we've offered internally in terms of trading tools to make our own business more efficient. For us, Christian, what's important is the consistency and the consistent growth that we've seen in that equities business. I would be remiss if I don't mention, yet again, the strength of the global nature of this franchise. We talk a lot about our competitive moats. Those moats are not built immediately. When we talk about these investment cycles, we've been investing in Asia, throughout Asia for some time. In different periods of time, you see different periods of growth across that region. Sometimes it's Japan, sometimes it's China, sometimes it's India. That global reach and that investment is one that you're just seeing take place and take shape, I should say, as the global markets begin to reemerge in this capital market cycle. We'll move to our next question from Brennan Hawkin with Bank of Montreal. Good morning. Morning, Brennan. Thank you for the questions. Hey, how are you doing, Ted? Talk to you again. I'd love to drill into the Carta relationship. You guys recently expanded that partnership. You made reference to it in your prepared remarks. Can you speak to the experience that you've had with Carta prior to that and your expectations for the now larger relationship? Yeah, it's really nice to hear from you, Brennan. It's nice to hear you back on our calls. This has been a multipronged approach in terms of the Carta relationship. As you know, Carta generally deals with the private markets side from the stock plan perspective, and you know that our platform deals with both the public and the private market side. The original relationship started as a referral-based model. As companies began to move from a private side to a public side, they would be referred to Morgan Stanley. That's working. We've seen evidence. We've had referrals. We've had a number of referrals since that original relationship was started, and we have seen conversions into our space from the public side already over the course of this year. It's been a great experience. There's now a second prong of the approach. As you know, what makes our platform on the Wealth Management side stand out is the value of advice, explaining the value of advice to our clients, to our broader client base, which is a standout. We often call it a category of one. What Carta now does is it's been interested in being able to offer these services not just to the individual founders or the top providers, the tops of the companies as they go from a private to a public state, but throughout their entire journey. We're offering our advice-based service to those individuals, and from that perspective, it also helps solidify some of the other work that we've been doing. We've done a lot of work on trying to service founders, on trying to service family offices. There are all different places when you can think about how we've grown our Wealth Management business in terms of the types of coverage we give to the individuals. This is just one more place where a relationship with Carta can be helpful, and it will allow us to better deepen relationships also with private companies. Excellent. Thanks for that, Sharon. Thanks for the warm welcome back. I appreciate it. When you think about that added access, right, plus the strong and established business that you have in Solium that bears a little bit more privates, I know you guys don't call it. You know what I mean. How much more substantial is that base versus 2021 when we last saw robust capital markets act? I think that goes back, I think it was Abraham. I can't remember. It may have been Dan Fannon. The first question that we answered about NNA. It's just the beginning. I mean, I don't know how else to say it. It's something when we look at what's going on in workplace across net new assets, across IPOs. These are all ways for us to build out the integrated firm. We talked a lot about it over the course of the last two years and more recently over this year when we spoke about the integrated firm effort. This is a place that you're seeing that build from a wealth management creation side. We have people around it to help shepherd individuals across the entire firm as you think about institutional securities, you think about underwriting, etc. There's a lot more to go in the entire ecosystem of being able to work with companies and their founders, understand them from beginning to end, and then bring them to market and service them throughout the lifecycle of that corporation. Our next question comes from Glenn Schorr with Evercore. Morning, Glen. Hi, quick one. Good morning. A quick one first. Sharon, I was very intrigued by your comment on the Parametric inflows and the large partnership with third-party investment advisors. My question is, Parametric's grown a lot, and I feel like we're still scratching the surface. Are you, and that was a direct thing and a direct sales into your wealth channel. Can you differentiate your growth mindset going forward for A, penetrating your huge client base, and then B, is there a big white label opportunity that this is starting to scratch the surface of? The way that I would describe it is what you're seeing is you have our wealth channel where you've seen growth, and that has been based on multiple years of what we call tax university. When we first bought Parametric, we worked within our system to explain the product and the benefits of what you can use, sort of tax harvesting, etc., within your portfolio, how is Parametric used to our financial advisors. Our financial advisors started to use it more and better understand that actual product. That's one channel of growth. You have other retail distribution channels that are also using it. What I spoke to specifically here that was a newer opportunity that we haven't seen before in such size is we've started to work with third-party asset managers as well. We had a press release out close to a year ago at this point where we did discuss that this is something we're working towards. We've talked about different types of asset managers who can look at their own portfolios and say, for my own portfolio and the assets that I cover, maybe this would be a good tool. That's what we saw in terms of the inflow. Those will be lumpier. I'm not saying that that's necessarily something that you're going to see every quarter, which is why we called it out. It's certainly another place and another channel where we see the opportunity for Parametric over time. Okay, awesome. I appreciate that. Bigger picture, Ted, I'm curious. I agree with everything you said. The regulatory capital framework is hopefully going to be more balanced. You got an 80 basis point refund recently. As you mentioned, you have over $300 billion excess capital, and you're making tons of money. I think the buybacks and dividends are good. My big question is, are there areas that you could deploy more capital at a higher pace to drive growth? Your return on tangible equity is hardly anything to complain about, but it is a big denominator. Are there areas that you could deploy at a faster pace, whether it be organic or inorganic, that would just broaden the platform, make the company better, drive future growth? Glen, as you say, that's the key question. The dividend is now $1 a share that is sacrosanct, and we'll continue to grow that along. The buyback has been opportunistic. We'll continue to buy shares back, maybe at a slightly higher cadence, but we're going to continue to view that as a tactical lever. As you know, over the last year plus, we've accreted $7, $8, $10 billion of capital dating back a number of quarters. That, of course, has been effectively capital put in the piggy bank. As we think about investment, you heard Sharon talk about a whole bunch of that. The best uses of capital continue to be internal investment into the business and to the integrated firm. Those are, they can either be adjacent investments or they can be a little more orthogonal, like digital assets or something that is kind of new and offers diversification effect. They're all in the cylinders of the strategy around the wealth investment manager and then the investment bank. The mantra has been to scale with our key clients to build out product capabilities to invest in technologies. That's why I thought it was great that Sharon went into some detail on some of the technologies that are being born as we speak. Some of them are efficiency-driven. Some of them are effectiveness-driven. If you think about the kind of locus of where the integrated firm is, it's around the key decision makers at these banking or asset management clients or our wealth management clients where they are the primary decision maker for strategic financing or catalyst events, which of course dovetails with the investment banking wave that is kicking in now. We are investing a lot of dollars, whether it's in the markets business intra-quarter or it is through our wealth clients either directly or indirectly. eTrade Pro is effectively an investment. It just happens to be an internal one. Sharon has spoken at some length around workplace and connectivity of private companies and Carta. Think about what we're doing with Zero Hash and building out the full wallet. Some of this stuff we can either, hearkening back to the equities days of 15 years ago, we might buy, we might build, we might lease, but those are investments that are made inside the business and eventually for the benefit of our financial advisors. We're also building out our bank. That is a key channel that we are much focused on, as you know, Glen, and that's gotten a lot of dollars and attention too. The organic opportunity is the one that clears the bar and checks the most boxes. That is going to be the continuing strong bias of the group. That having been said, we are well aware of the capital cushion. We do have, thanks to the better part of 15 years of Mr. Gorman, we have been well-versed and trained around the thinking on the inorganic, whether it fits in the strategy, whether the culture is right, whether the timing makes sense, and then ultimately whether the price works. Strategy, culture, timing, price. Right now, there is a lot of product that is coming at us. In virtually every case, Glen, we feel we can do the build internally, organically. For the last two years, I think you'd agree what's been most important in the delivery of our management team, which has worked together for 10, 15, 20 years, beginning, of course, with Dan and Andy leading the firm, and then Sharon, Eric, Charles, and then the rest of the operating committee, that for the last two years, we've been focused on saying what we're going to do and putting up the numbers. That hasn't been at the total expense of the inorganic, but we have felt comfortable continuing to make the case that there is growth both in wealth and investment management and then durably inside the investment bank, and that the sum of those two would be greater than the whole in the context of the integrated firm, that it would not just be kind of salesy, but it would be something that in the right kind of market environment would offer operating leverage. In a sense, it's been the little picture, the little picture of both kind of squirreling away from chestnuts, but then also building out the income statement, making sure that there's manifestly operating leverage against the uncertainty of geopolitics and transitioning economy. Over time, we can consider carefully whether the inorganic ticks all four boxes, strategy, culture, timing, price, and whether we want to fold something in. As you well know, this firm has successfully integrated Smith Barney, Solium, E*TRADE, and Eaton Vance. There is such a thing as winner's curse in the financial services space, and we were not about to make that mistake. We don't need to put up a print for the sake of it. We are very excited, by the way, on our announcement on Zero Hash. We think it's great. We're building out the full wallet, and we will be ready to go as we move into 2026. Whether we continue to compound the wealth and asset management base through $10 trillion organically, or whether we do something inorganically, it'll have to fit the test. I wanted to give you a sense that, of course, we think very much about the big picture, you know, forests of the trees, but we also, in this two-year period, have been very much focused on the little picture, the speck on the rug, and making sure that we have numbers that are clean and that sustain the valuation that the market has awarded us. We move forward with a capital buffer that is 250- 300bps+. We'll move to our next question from Erica Najarian with UBS. Yes, hi. Morning, Erica. I had one follow-up. Good morning. Just had one follow-up question on the back of the first question on the investment banking backlog. As we think about the sustainability of the investment banking strengths, I can't help but notice that, of course, markets are at all-time highs and spreads are quite tight. It seems like the right precondition for the realization pipeline for sponsors to also take hold. Ted, I'm just wondering, what other preconditions do you think are needed for that to be, you know, for the realization pipeline to spill into 2026 activity? We're seeing it. Thank you, Erica, for the question, but we're beginning to see it already. We saw it in the third quarter, and it continues to be a big part of our sort of backlog as you think about the pipeline for the forward. The reason that we think that it's coming to fruition is, as you said, we are seeing the capital markets kick in. As Ted said, he says the capital flywheel is working. The capital markets flywheel is working. Specifically, when we have IPOs, that provides another lane for exit. That provides two sort of places that a financial sponsor can look, both an acquisition opportunity and exit from the perspective of an advisory or from the perspective of IPO. What we've seen is that that's been helpful to help the engagement, and it's certainly something that's already beginning to play out in the marketplace. The bigger picture here is that being a private company, a successful private company over the last number of years, as you know, Erica, the old rule of thumb was when you had a certain number of beneficial owners or a certain level of wealth created, you needed to go public if for no other reason to defuse employee stock option plans and to have a currency to get bigger through acquisition. The reality is that the democratization of the private channel and the ability for companies to stay private longer has been one that has very much taken hold and, for lack of a better word, has been institutionalized over the last five, ten years. Being a private company, a good private company, has been a good thing, and the Street has been helpful in offering sponsors additional space beyond the 10-year fund to continue to keep the winners in-house. At the same time, being a public company has not been that great. The regulation got, as you know, much tougher, and just sort of the reality of being a mid-cap or even small-cap company that may be orphaned and still has to comply with the regulatory burden is tough. One of the things that we think is going on here is that with some rebalancing of the regulatory framework, the ability to go public, the ability to go public perhaps earlier and to draw the attention of new issue investors who are not cleaning up a secondary sale of a financial sponsor, but are a strategic investor, but in fact are coming in where there's still plenty of growth and a sort of going public discount premium that makes it an exciting asset class again, we're optimistic about that. The reality is the sponsors have not moved as fast because they've had the ability to sustain these capital structures as private companies. That has its pluses, that has its minuses. What's changed, though, is that notwithstanding all of the concerns with elements of the three-prong strategy, the demonstrated success of prong one and now much of prong two and clearly prong three, i.e. deregulation, which will be very much a pro-business and hopefully pro-broader economy phenomenon, makes it more interesting for the strategic buyer or the seller, in fact, if they want to purify their portfolio, to go in and do something. To do something on a cross-border basis, to know that their regulator is going to give it a thumbs up or thumbs down versus stymieing it for uncertain periods. There may be deals in the national interest that won't go through, but the entire proposition of mid to large to mega-cap M&A has been one that has not been on the table for a long time. If there's going to be large-cap M&A across growth industries around the world, there will also be an IPO market as they work symbiotically in terms of attracting growth capital to grow the winners. Great. Thanks for the complete answer. That's it from me. Thanks, Erica. We'll move to our next question from Devin Ryan with Citizens. Hey, good morning, Ted. Good morning, Sharon. How are you? Morning, Devin. I want to start with a question on Wealth Management and that interest income. Obviously, you know, really benefited as short-term rates rose in prior years. I heard Sharon's comment for a modest increase in NII in 4Q, even as the Fed is now starting to lower rates. I think, you know, what's becoming more clear is there's a lot of natural hedges in the model there: margin balances, sec lending, pledged assets, stabilization, and kind of the brokerage sweep balances. I'm just curious, as we think about, you know, rates now starting to move lower and perhaps the first 100 basis points of cuts, do you see a scenario where GWM NII can actually grow? Can you just talk a little bit more about some of these hedge impacts as we get the other side of this? Thanks. Yeah, absolutely. I'll take the question. We will revisit 2026 guidance in 2026. Sitting for where we are today, yes, there is room for an inflection as you continue to move higher. You could ask me, how could you, to your point, what are these offsets and how can you get there even if rates begin to move down? Of course, it will depend on how quickly rates move, and if it's priced as it is from the forward curve we sit in today. All of my answers are predicated on that, on kind of this moment in time. At this moment in time, the reason that you can have that outlook really has to do with the lending balances that we've seen and the consistent growth in lending balances. SBLs, for example, is something that I talked about this quarter. I think we've talked about it over the course of the last couple of quarters and a place of growth. That is coming not just from existing clients. You could say, your existing clients, aren't they tapped out? We're getting new balances. We're getting new client participation. There's more to do to help the bank itself grow, as Ted said. That's a place where you can have that potential growth. The other offset that I would note to you is historically, when we've seen rates come down, we've also seen an increase in balances. Yes, there's a trade-off in terms of how quickly will those interest rates come down and what will that mean. That is from a sense of modeled behavior, another natural point that you could see in terms of a potential upside rather than downside on the forward. That's great color. Thanks, Sharon. Just a quick follow-up on the equities trading results. Obviously, it feels like the bar keeps moving higher here. You referenced the growth in financing and kind of record results there. Can you just give us a sense of what the growth function has looked like in financing relative to intermediation over the past couple of years and what the mix looks like there today and how that's evolved as well? It just feels like you're building a higher base overall in equities and love to get a little more sense there. Thank you. Certainly. I mean, we talked about record balances in financing and we talked about that. That should obviously think about that relative to where markets are. You're gaining client share, wallet share, but you're also benefiting, one is benefiting from increased balances as the markets have risen. As it relates to the more transactional level of activity, that's going to really be based on what's going on in the marketplace in that time. You could see that more based on a volume-driven approach, i.e. are volumes rising or are they falling and client activity more broadly? That might be more idiosyncratic to your point. Yes, the base will rise as those prime brokerage balances will rise, assuming that there's not sort of some major market decline which would cause a contraction in balances. Yeah, I mean, to echo that, we're at 6,700 S&P and, you know, index asset price highs around the world. If there is a deleveraging event or just lower, let's say there's a sort of recession scare and the markets are lower, by definition, the financing revenues will be lower. I mean, they are linked in that sense, as you know, inextricably. What is an interesting development, though, inside of equities is, first of all, as global as ever, as Sharon has talked about, we have a business that is thriving both in Asia, which is, as you know, multiple locations, and then also in Europe, again, multiple locations. Then also the development of our derivatives business, liquid derivatives, and the cash business, once thought to be one that would be totally electronified, that is being run very much as a barbell with a best-in-class M-SET product, as you're aware of, but also one where the high-touch, old-school research sales-driven product with a world-class research department, with folks who have been at Morgan Stanley for 20, 25, 30 years, who are embedded with our asset managers and are able to help them capitalize in a market now that is rewarding dispersion across strategies and across weighting. For the first time in a generation, you have real dispersion amongst our clients, which means they are looking for intellectual capital. We can offer that and that there is real ability now to monetize that, not just in the classic financing pie, but also across cash and derivatives. We'll move to our next question from Mike Mayo with Wells Fargo. Morning, Mike. Hi, Ted. In the past, you said it's the moment of, I think, quote, wow, and I guess it's playing out. You mentioned IPOs, mergers, the flywheel. You mentioned U.S., Europe, Asia, mid, large, major corporate. It seems like a lot's going on. I think the question is, can you size where we are in the capital market cycle? Like, what inning are we in? Are you over-earning, under-earning? If you can mention this for us, thanks. You have been at this long enough to know that the typical answer that one would give would be driven by where we are in the economic cycle. I'm just not sure it's working that way this time. There is clearly pent-up supply of product and idea flow that, as we've talked about, stems back from the earliest days of the pandemic, whether it's embedded in sponsor portfolios or it has been sort of ideas in the making inside of the EU or greater China or in Japan or obviously in the United States. Some of that inventory is meant to come. There is also the reality of almost like a Mika-esque, you know, big size creates category killers. The regulatory kibosh on large-cap M&A has also been kind of an unnatural constraint to the supply of large-cap mergers that now need to happen to defuse the cost of AI. I think those are all tailwinds. What I am less certain about, and I wouldn't want to be caught on the wrong side of kind of an ambulant take on the world, is there is a lot of geopolitical uncertainty by definition. There is considerable uncertainty around how a key economy manifests itself in terms of Fed policy and then fiscal response function. To just ignore that would be silly. The markets have come a long way. There is also the reality that the private capital class has been democratized over a relatively short period of time. There will be occasions where folks are going to find out things they don't like around liquidity or issues, whether, by the way, those are public or private companies. I don't think it's just a blue sky, all boats steaming. What I do think is that for the first time in a long time, the largest investment banks that have global enterprises that have invested in world-class corporate finance bankers who can offer the full set of global idea flow and then risk management around uncertainty through an M&A announcement, which is not just regulatory uncertainty, but it could be foreign exchange. It could be the hedging of interest rates. Then through to the complexity of a rights offering or a sub-IPO, that entire daisy chain, Mike, probably takes us back to something that feels like the mid-1990s, for example. It could take us back to periods that are in the mid-2000s before credit got out of hand, where you have real companies that are getting out and doing back-to-basics corporate finance. The difference now is you need the full kit, you need the full global support. It has been, as you pointed out and rightly pointed out, a lot of talk about a lot of green shoots for a heck of a long time. Some folks have blinked and other folks have continued to invest. We feel good about that opportunity over the next three to five years. Will there be periods where the windows could well shut because the geopolitical uncertainty takes us to risk off or asset prices correct? Absolutely. In which case, which companies you bank, which ideas are going to actually be the ones that win the day? That's where winning and losing is going to be made amongst the global investment banking group. You're staffing and resourcing for this capital market cycle for the next three or four years or so? Yeah, we have the kind of tension inside where on the one hand we have an installed base because, as you know, introducing new bankers on what is sort of the longest sale, it's like a financial advisor. This is like the key event for the CEO, the CFO, the founder. They don't want to meet someone new. The installed base has to have been there, which is why a lot of the hiring we did, we did over the last three to five years. On the other hand, you don't want to overhire because you know that investment banks tend to behave procyclically. Is there some tension in the system from folks who want us to have more bodies in front of $3- $5 billion market cap companies to get that sell side? Yes, there is. I think that's a good thing. When the tension is like a three, four, that feels right. If it's one, that means you're probably overdone. As you would point out, then you've got a purge and reset, and it kind of messes up the narrative. If it's a seven or eight, that means obviously we haven't made a decision about where we want to have leadership. We want to have leadership in the core trusted advisor bracket. The integrated firm proposition, of course, is that you may be trusted advisor to a founder, and that founder may have a relationship with a wealth manager, and that wealth manager then can work with the investment banker. It's not forced behavior. It's behavior that is something that is a natural because we've been at it together for a long time. We'll move to our next question from Chris McCratty with KBW. Great. Good morning. Thank you. Morning, Chris. Good morning. Ted, you talked about the 300 basis points of excess relative to minimums. I guess a two-part question just to follow up. Number one, what's the right level of management buffer there? How that might be evolving and perhaps the algebra behind that as the first question? I mean, I think that we've highlighted where we have excess capital. That's obviously on a risk-weighted basis, on a risk asset-based basis. We also have excess capital as it relates to SLR. In terms of how and where it's evolving, it will really depend on everything that we see on the forward. You think about the models that we're supposed to get from a CCAR perspective, that's going to help us understand base RWA or stress RWAs. You think about Basel, that will help us understand what is base RWAs. Then you have to understand the overlap and GSIB. Those are all three pieces on a risk-based capital framework that we're waiting for. That will help inform us on the forward look, as well as a finalized rule on SLR, which I think the industry is really looking forward to seeing so that we can move away from that being a binding constraint and a backstop. I don't know if this is algebra, Chris, but the way I would sort of think about it is in line with what Sharon just said. I believe in the last call I said 200 plus, and we were at 15 for the quarter. Obviously, there's oscillation from period to period, but we were at 200 plus, I said, we said, right? This quarter went from 15- 15.2, notwithstanding the payout of the dividend and the buyback because we just accreted more capital. We also, during the period, received the reconsideration. On C car from the Fed to the tune of another 80 basis points. 80 plus 20, that's 100. I'd say the 200 goes to 250 plus in the spirit of conservatism, taking 50 out of the 100. All right. 200 plus was the prior. 250 plus feels like the way to say it. Sure, we could say more because the actual number is 340. The implied buffer is there. I think others have said, colleagues on prior calls, and I would much agree with and repeat the algebra, as you say, around the number. By definition, you need to have effectively a buffer on a buffer because of the regulatory uncertainty, which nodule is the governor, and then the entire process of going through submissions and the like. We're hoping some simplification, some additional transparency, which we're much seeing from the Fed and the other regulators, which we are. It's early days, but we're really heartened by that. There's more of a common sense approach to this. I should, by definition, over time, prudently lower the size of anyone's buffer because they just know predictively what framework they are being measured by, as opposed to the uncertainty underlying the test itself in times that are relatively not uncertain for large, well-capitalized banks 15 years after Dodd-Frank. That would be the way to think about it in terms of the size of the buffer. If you wanted to just jot down a number, I'd say 250 plus is a comfortable way to go from here. Did you have another question? Oh, no. Looks like we're moving here. We're moving. Next question comes from Saul Martinez with HSBC. Hey, good morning. Okay, Saul. Saul, you're the last one up. I'm getting signals that you're... Let's make it a really... Softball, softball, softball here at 10:40, please. I think I'll ask a question you've, I think, in a way you've been asked a few times about the sustainability of the results in institutional securities. I guess I'll ask it a little bit more bluntly. You did 20% ROTCE this quarter. Through the nine months, 17%. I guess, can you sustain this type of profitability in institutional securities? Because it would imply that given your business mix, it would imply that your ROTCE or consolidated level would be above 20%. IBC's obviously this quarter, very strong at levels we haven't seen since 2021. Obviously, a lot of room for optimism for a lot of the reasons you've highlighted, Ted. We are really in a sweet spot, it seems, because markets businesses are also humming and doing extremely well. I'm just curious to your perspective, is an environment where investment banking continues to grow over a multi-year period, is it consistent with a backdrop where markets revenues can be sustained at these levels or even grow, given these businesses do benefit from a volatile economic and market backdrops, recognizing that there are many sources of durability too, and perhaps more than there have been in the past. I don't know if that's a softball question, but I'll try to put a bow on the conference call and leave you with that one. Yeah, I thought you said it nicely. I wouldn't know to call it softball. I'd say it was sort of a medium ball, but a very fair question and sort of a kind of a cousin of Mike's question. Look, again, 6,700 S&P, you are going to have businesses that are going to, if you execute well, you're going to have performance. Assuming the operating model is well-functioning and tight credit spreads, the financing flywheel should work. If you have lower asset prices and deleveraging and credit spreads widen because there's a recession concern or an inflation scare, my guess is markets businesses generally are going to perform less well. There's no untying that link. Some of this has to be driven by whether you think we are at the early stages of re-acceleration of growth in the U.S. economy and then the global economy, and there are signs that that is happening, or you think you're actually in a later stage of market evolution, i.e., the economy may be okay, but the markets have had a huge run, risk assets have had a huge run, and we are going to chop around or even trade lower, in which case the markets businesses are generally on the street going to have to work through that. That having been said, we spent a lot of time doing everything we can to make sure that there is durability inside of these businesses, that we are an essential one, two, three partner to the largest asset managers with whom we are wedded to, and that we are doing business that we think is right in line with advising our clients. You see it, the VAR ticks up, but not dramatically, that the use of capital is prudent, but that we are connecting not just inside of equities, but across fixed income. I'd call out, by the way, that the performance of the fixed income business for the last whole bunch of quarters has been remarkably stable. That speaks to the management of that business as a part of a durable narrative inside of the investment bank, but then across the firm. The investment banking flywheel, again, is also activity-based and economically sensitive, but we do think that the pent-up supply there is going to have to come, and we do believe that in the investment banking and capital markets new issue arena, we are gaining share. We would be seeking to do that globally over the next year or two years. As it relates to the markets business, i.e., sales and trading of stocks and bonds, we want to do it prudently. We're not looking to overreach. We are well aware of what the underlying valuation narrative is for Morgan Stanley. We want to serve our clients. We want to help fill capacity and capability for them, and we are going to continue to have a high bar on what new business we take on and how it generates incremental margin. Ladies and gentlemen, this concludes today's conference call. Thank you, everyone, for participating. You may now disconnect and have a great day.