Morgan Stanley vs JP Morgan

The Global Banking Powerhouses

Both Morgan Stanley and JP Morgan need no introduction. Their differences however are nuanced and this article explores exactly that. How the two powerhouses differ from each other. Assuming you aspire to land a job or internship in these firms, you may want to know that here you can see 120+ verified successful cover letters/applications and interview testimonials for the largest investment banks, private equity firms and asset managers of the world.

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What is in the Name: Morgan Stanley v JP Morgan

Morgan Stanley is a multinational investment bank and financial services company headquartered in New York with 500 offices in more than 42 countries and more than 60,000 employees worldwide. You might be wondering does Morgan Stanley not sound similar to JP Morgan, are they not the same thing. To a certain extent, you will be right in such thinking and not right in a lot of ways as they are two distinct independent companies. You are right in noticing the similarity of names because one of the principal founders of Morgan Stanley, Henry Morgan, was the grandson of J.P Morgan.  While the naming may indicate that they are similar companies, they are independent entities. J.P Morgan’s grandson, Henry Morgan, founded Morgan Stanley in 1935. As such, Morgan Stanley is a standalone investment bank and does not currently have any relations with J.P. Morgan. 

Conversely, JPMorgan Chase & Co. is a multinational banking and financial services holding company headquartered in New York with over 136 offices across 60 countries and employs more than 240,000 people. A lot of the time people confuse or ask if JPMorgan Chase & Co. is the same as JP Morgan; the answer is there need not be any confusion as they are the same. The entity was previously known as JP Morgan until it was merged with the Chase Manhattan Corporation in 2000 to become JPMorgan Chase & Co.

History: Morgan Stanley v JP Morgan 

The creation of Morgan Stanley came as a result of the fallout from the Glass Steagall Act of 1933 which provided that a corporation could not have investment banking and commercial banking businesses under a single holding entity. J.P Morgan which was one of the entities affected by the Act decided to take on their commercial banking business practice over their investment banking practice. As a result, Henry Morgan and Harold Stanley with other employees left to form what we know today as Morgan Stanley. The company opened up its offices to the public in 1935. 

Notwithstanding JP Morgan’s recent birth, the company enjoys a 200-year ancestry, having traced its roots to 1799 with the firm being built on the bedrock of more than 1,200 predecessor institutions. Their oldest predecessor is The Bank of The Manhattan Company which was formed in 1799 by Aaron Burr on the back of the New York State legislature to supply pure and wholesome drinking water to the city’s people. In 1955, The Bank of The Manhattan Company acquired Chase National Bank, a fundamental piece of the firm today, to form the bank, Chase Manhattan Bank. Another important predecessor is J.P. Morgan which was formed in 1871 by J. Pierpont Morgan and Anthony Drexel. Originally known as Drexel, Morgan & Co, it changed its name to J.P. Morgan & Co. in 1895.

The Business: Morgan Stanley v JP Morgan

Morgan Stanley has three major business segments. Their Institutional Securities segment provides institutions such as corporations and governments with services involving capital raising, financial advisory, M&A, restructurings, and the like. The Wealth Management segment provides financial and wealth planning solutions to individual investors and small to medium-sized institutions. Lastly, the Investment Management group works mostly with institutional investors and retail clients and provides them with asset management products and services in equity, fixed income, alternative investments, real estate investment, and private equity. 

JP Morgan’s business segments are divided into five major segments. The Consumer and Community Banking arm provides services to its clients through its branches, automated teller machines, and online, mobile, and telephone banking platforms. Through the Corporate and Investment Banking arm, the bank offers investment banking, market-making, securities products, treasury and other services to financial institutions, investors, global corporations and governments. The Asset and Wealth Management division takes care of the full ambit of asset classes, including equity, fixed income, alternatives, exchange-traded funds, money market and multi-asset solutions. 

Show Me the Money: Morgan Stanley v JP Morgan

For the fiscal year of 2021, Morgan Stanley reported that its full-year net revenues were $59.8 billion compared with the $48.8 billion it had in 2020. Their financial report shows that Institutional Securities is their biggest revenue maker with record net revenues of $29.8 billion, a 13% increase from the $26.4 billion in the fiscal year of 2020. Their next biggest revenue makers are the Wealth Management and Investment Management Groups with $24.2 billion and $6.2 billion respectively. As of December 31, 2021, Morgan Stanley reported that assets under management were $1.6 trillion.

For the fiscal year of 2021, JP Morgan reported total net revenue of $121.6 billion, a 1% increase from the $119.9 billion reported in 2020. The bank reports that the Corporate & Investment Bank sector is its largest source of revenue with it bringing in $51.7 billion. The Consumer & Community Banking segment is their next biggest revenue maker bringing in $50 billion. JP Morgan also reported that assets under management soared to a record-high of $3.11 trillion as of December 2021.

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Charles is a writer, practising lawyer and personal trainer who loves learning and developing himself. He graduated from Middlesex University, London with eight first-class grades in the second and third years of his law degree, and received a postgraduate offer from Cambridge University. He loves strength training, boxing and encouraging people to succeed in their pursuits (legal ones)

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