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Morgan Stanley elevated two of its longtime executives to bigger jobs, highlighting a pair of strategic priorities for the Wall Street firm while offering additional clues on its succession plans.

Edward Pick, 46 years old, who oversaw the revival of Morgan Stanley's stock-trading arm after the financial crisis, was named global head of sales and trading, according to a memorandum sent to Morgan Stanley employees Thursday. The new role gives Mr. Pick oversight of fixed-income trading, a key profit driver for banks that has been challenged by new regulations.

Morgan Stanley also tabbed Dan Simkowitz, an investment banker who co-led the firm's stock- and debt-underwriting business, to be head of investment management, reporting directly to Chairman and CEO James Gorman, the memo said. Overshadowed by the firm's wealth-advisory business, which had doubled in size in recent years through the acquisition of Citigroup Inc.'s Smith Barney brokerage, the money-management division had previously fit within the remit of Gregory Fleming, one of the firm's two presidents serving under Mr. Gorman.

Mr. Simkowitz, 50 years old, will join Mr. Pick on the firm's operating committee, said the memo, signed by Mr. Gorman, Mr. Fleming and Colm Kelleher, president of Morgan Stanley's investment-banking and trading businesses.

"We always need to look to our future while managing the present," the three executives wrote in the memo. "Our future includes developing strong executives to serve at the most senior levels of the firm, ensuring we regularly bring new energy and intensity to areas where we can move the needle over the next five years."

Messrs. Pick and Simkowitz each ran one of the firm's flagship businesses, and both joined Morgan Stanley in 1990. They will now be tasked with overseeing divisions with less impressive track records, fixed income and investment management. Their promotions follow other moves Mr. Gorman has made this year to cultivate a group of managers who may one day succeed him or his top two deputies, Messrs. Kelleher and Fleming.

"They're grooming the next generation, and the only way to do that is to give them more responsibility," said Glenn Schorr, an analyst with Evercore ISI.

As Mr. Gorman's turnaround plan gained steam, lifting the firm's returns and its stock price, the CEO has increasingly focused on ensuring the transition to a new generation of leaders is more orderly than those in the recent past. In the years before the financial crisis, Morgan Stanley's merger with Dean Witter gave way to a bitter power struggle, an exodus of senior executives, and the return of its former chieftain, John Mack.

While Mr. Gorman was Mr. Mack's choice as Morgan Stanley's next CEO, the decision seemed far from settled when the former management consultant and brokerage executive had arrived at the firm from Merrill Lynch & Co. in 2006.

Left unsaid in Thursday's memo was the belief by many Morgan Stanley executives that Mr. Gorman, 57 years old, is expected to remain in his post for the foreseeable future. Indeed, all of the significant management moves of the past year, including Jonathan Pruzan's appointment as finance chief, appear to presage future changes closer to the top.

Mr. Simkowitz's appointment marks the latest Morgan Stanley investment banker to cross over into another division, part of a push by Mr. Gorman to round out the experience of rising executives at the firm. The decision to give Mr. Simkowitz a direct line to Mr. Gorman was made to make the job more attractive, and to highlight the division's potential, people familiar with the matter said.

Nevertheless, it was difficult for some outsiders to avoid concluding that Mr. Fleming had lost something in the latest reshuffle. A former Merrill executive who once sat on BlackRock Inc.'s board, Mr. Fleming is often cited as a potential CEO candidate for financial-services companies considering a leadership change.

People familiar with Morgan Stanley executives' thinking rejected the notion that Mr. Fleming was losing favor with Mr. Gorman or the firm's board. Mr. Fleming remains in a top lieutenant to the CEO and, at 52 years old, is five years younger than Mr. Gorman.

Messrs. Gorman and Fleming had discussed since early 2014 a plan to hive off the money-management division from the latter's main responsibilities running the wealth business, a unit that comprises more than 40% of the firm's revenue, the people said.

Mr. Fleming is expected to push hard in building out the wealth unit's banking arm, considered one of the firm's most-promising areas of untapped growth. The bank has about $140 billion in deposits, and that figure could surge above $200 billion in the coming years as Morgan Stanley persuades its wealthy brokerage clients to park more of their cash with the firm, one person familiar with the matter said.

Investment management now accounts for just 10% of the firm's revenue. The gradual strengthening of Morgan Stanley's balance sheet, and its improved standing with regulators, has emboldened its executives to consider more aggressive ways to build out the unit, the people said.

Morgan Stanley may consider acquiring other money managers, the people said. Many of the potential deals are expected to be smaller, given the Federal Reserve's role in limiting how much stockpiled capital big banks can deploy, but Morgan Stanley could now be a player in larger acquisitions as businesses become available.

The firm is also considering a further push into retail money management,, one person familiar with the matter said.

Morgan Stanley executives had privately speculated for months that Mr. Gorman would promote Mr. Pick, whose group has overtaken Goldman Sachs Group Inc. as Wall Street's biggest equities business in recent quarters.

Gradual changes to the way investors buy and sell bonds and other debt securities, and the possibility that those markets will eventually more closely resemble how the stock market functions, convinced Morgan Stanley executives that the time was now to give Mr. Pick these broader responsibilities, one person familiar with the matter said.

Mr. Simkowitz had worked on some of biggest initial public offerings in history, including Alibaba Group Holding Ltd. and Facebook Inc. and served as a key adviser to the U.S . government on General Motors Co.'s share sale.

In a separate memo, Morgan Stanley announced that Mo Assomull, 42, will become the firm's sole head of global capital markets.

Write to Justin Baer at justin.baer@wsj.com

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(END) Dow Jones Newswires

October 01, 2015 13:45 ET (17:45 GMT)

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