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Morgan Stanley’s CEO said private credit is currently in its “adolescent moment” with “extraordinary growth potential” during the long term.
CEO Ted Pick’s comments come amid a tumultuous moment for the $1.8 trillion alternative asset class, with funds from firms including BlackRock, Apollo Global Management, Blue Owl and others facing a wave of investor redemption requests. (On some non-traded business development companies and interval funds, redemption requests have exceeded the funds’ monthly and quarterly caps, leading to distributions being prorated.)
Pick spoke about private credit’s impact on Morgan Stanley’s wealth management division during a Wednesday morning call detailing the company’s first-quarter 2026 earnings, during which the firm’s wealth management division posted record net revenue.
In total, Morgan’s wealth business boosted revenue 16% year-over-year to $8.5 billion. Like many of its industry peers, the firm benefited from market growth in 2025 and volatility stemming from the war in Iran, artificial intelligence and President Donald Trump’s trade policies.
Net income climbed to $2.1 billion, “primarily driven by the cumulative impact of lending growth and higher average sweep deposits,” according to a Morgan Stanley earnings release. Total expenses increased since the first quarter of 2025 due to “higher compensable revenues” for the firm’s financial advisors.
During the earnings call, Pick noted that alts are only about 5% of the total financial advisor-facing wealth business (including real estate, private equity and private credit infrastructure), with private credit taking up an even smaller 1%. In investment management, private credit accounts for less than 1% of total AUM (“well under $20 billion”).
“So, our exposures are small and modest, but it is an asset class that I think there was a lot of learning around over the last couple of weeks,” he said. “I think that is very healthy, but we just need to remember the headline point here, which is that credit should perform during periods when the economy’s performing. This will be no different.”
Pick’s statement mirrored JPMorgan Chase CEO Jamie Dimon’s comments on that firm’s earnings call on Tuesday, saying he wasn’t “particularly worried” about private credit’s systemic impact, and that he was more concerned with how a broader credit cycle would “filter through the whole system,” a sentiment with which Pick agreed.
“Right now, we’re not talking about the ‘R’ word, and that’s a positive for broad credit,” he said.
Bank of America Wealth Management (including Merrill Wealth and the firm’s Private Bank) also benefited from market growth and volatility, driving higher trading volumes and year-over-year revenue growth of $6.7 billion, a 12% jump since the first quarter of 2025.
In an earnings call Wednesday morning, CEO Brian Moynihan said the firm’s wealth business had a “nice operating profit,” with markets up year-over-year, and noted the firm had hired about double the number of advisors this quarter than in Q1 2025 while keeping advisor attrition rates low.
“The loan growth in wealth management has been very strong for the last year or so,” he said. “So we feel very good about it.”
Additionally, the firm brought in $4.2 billion in asset management fees and $1.3 billion in net income, up 15% and 32% year-over-year, respectively (though net income dropped from last quarter).
AUM balances stood at $2.1 trillion, up 14% from the prior year, while average loan rates grew 13% since last year to $262 billion. In Merrill Wealth specifically, the firm reported $3.8 trillion in client balances, with about 3,300 net new $500,000+ households added during the quarter.
During the call, Moynihan noted that the firm was down approximately 1,070 employees due to attrition. In a subsequent question about AI’s ongoing impact, Moynihan reminded listeners that, in 2007, before Bank of America had even acquired Merrill (among other companies), there were more employees at the firm than there are today.
In short, Moynihan stressed shifts in investment are “not a new trend” for Bank of America, saying the firm must hire around 1,300 each month to “stay neutral,” but that the broader headcount can be adjusted by letting “attrition be your friend.”
“And that’s how we got down a thousand people, but it comes from eliminating work and applying technology, and consumer and commercial customers using those technologies,” he said. “And AI gives us places to go we haven’t gone.”
In the Morgan Stanley call, Pick also lauded AI’s impact on the firm’s workplace, saying it is “our friend” and that it is “the latest generation of technology that is going to be part of the ecosystem.”
“What is new is that we are beginning to evolve from pure efficiency exercises where you could have effective replacements of what might have been a call center or what might have been an operational function to automate routine tasks like moving money to something that over time becomes a productivity phenomenon,” he said. “And that efficiency and effectiveness transom is super, super compelling.”
Morgan Stanley and Bank of America’s earnings follow first quarter earnings from JPMorgan Chase, Wells Fargo and Citigroup this week in which all three firms also boasted double-digit year-over-year revenue growth, though broader earnings results were more mixed.
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