Morgan Stanley 2009 Annual Report Download - page 11

affiliated and unaffiliated broker-dealers. A small number of unaffiliated broker-dealers account for a substantial
portion of Van Kampen open-end fund sales. Morgan Stanley also sells mutual funds through numerous
retirement plan platforms. Internationally, Morgan Stanley distributes traditional investment products to
individuals outside the U.S. through non-proprietary distributors, and alternative investment products are
distributed through affiliated broker-dealers.
Operations and Information Technology.
Morgan Stanley’s Operations and Information Technology departments provide or oversee the process and
technology platform required to support its asset management business. Support activities include transfer
agency, mutual fund accounting and administration, transaction processing and certain fiduciary services, on
behalf of institutional, retail and intermediary clients. These activities are undertaken through Morgan Stanley’s
own facilities, through membership in various clearing and settlement organizations, and through agreements
with unaffiliated third parties.
Research.
Morgan Stanley’s research department (“Research”) coordinates globally across all of Morgan Stanley’s
businesses. Research consists of economists, strategists and industry analysts who engage in equity and fixed
income research activities and produce reports and studies on the U.S. and global economy, financial markets,
portfolio strategy, technical market analyses, individual companies and industry developments. Research
examines worldwide trends covering numerous industries and individual companies, the majority of which are
located outside of the U.S.; provides analysis and forecasts relating to economic and monetary developments that
affect matters such as interest rates, foreign currencies, securities, derivatives and economic trends; and provides
analytical support and publishes reports on asset-backed securities and the markets in which such securities are
traded and data are disseminated to investors through third party distributors, proprietary internet sites such as
Client Link and Morgan Stanley’s sales forces.
Competition.
All aspects of Morgan Stanley’s businesses are highly competitive and Morgan Stanley expects them to remain
so. Morgan Stanley competes in the U.S. and globally for clients, market share and human talent in all aspects of
its business segments. Morgan Stanley’s competitive position depends on its reputation and the quality of its
products, services and advice. Morgan Stanley’s ability to sustain or improve its competitive position also
depends substantially on its ability to continue to attract and retain qualified employees while managing
compensation and other costs. Morgan Stanley competes with commercial banks, brokerage firms, insurance
companies, sponsors of mutual funds, hedge funds, energy companies and other companies offering financial
services in the U.S., globally and through the internet. Over time, certain sectors of the financial services industry
have become more concentrated, as institutions involved in a broad range of financial services have been
acquired by or merged into other firms or have declared bankruptcy. Such changes could result in Morgan
Stanley’s remaining competitors gaining greater capital and other resources, such as the ability to offer a broader
range of products and services and geographic diversity.
Institutional Securities and Global Wealth Management Group.
Morgan Stanley’s competitive position depends on innovation, execution capability and relative pricing. Morgan
Stanley competes directly in the U.S. and globally with other securities and financial services firms and broker-
dealers, and with others on a regional or product basis.
Morgan Stanley’s ability to access capital at competitive rates (which is generally dependent on Morgan
Stanley’s credit ratings) and to commit capital efficiently, particularly in its capital-intensive underwriting and
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