Morgan Stanley Drops as Firm Warns of Lower Margins in Wealth

Morgan Stanley’s new chief executive officer, Ted Pick, received a skeptical welcome from investors, who are turning their attention to the firm’s ability to meet its goals in its expanding wealth business.

The bank’s shares dropped the most in three months as its traders fell short of expectations and executives said lower wealth-management margins may stick around. The unit reported a pretax margin of 24.9% for the full year, and Chief Financial Officer Sharon Yeshaya said on a conference call with analysts that “it’s reasonable to expect reported margins to consolidate in the mid-twenties range over the near ...