Wealth management unit working for Morgan Stanley

Morgan Stanley's first quarter earnings Thursday showed that the financial company, after getting bludgeoned in the financial crisis, is staking its future on the steady business of wealth management.

Profit and revenue soared in wealth management, Morgan Stanley reported, even as they dipped in investment banking.

The wealth management unit generated more fees, and clients shuttled more assets to the bank. Profit margins rose and so did employees' productivity.

The wealth management unit accounted for about 41 percent of revenue, after stripping out an accounting charge. Three years ago, when CEO James Gorman took over, it accounted for 34 percent.

In contrast, the company's investment banking unit brought in less revenue from trading bonds and commodities, and made less money on advising companies on mergers and acquisitions.

Overall earnings slipped 12 percent from a year earlier -- to $1.2 billion, or 61 cents a share. While that result beat expectations of analysts, investors weren't impressed. The stock fell 5.4 percent, down $1.16 to $20.31.

Analysts, however, described the quarter almost like a holding period. They said the bank was moving toward the correct positions but were disappointed by weaknesses in the investment bank. They're also anxious for the Morgan Stanley Smith Barney deal to be completed.