Jonathan M. Pruzan - Morgan Stanley - CFO & Executive VP
Yes. And again, I tried to highlight some of those, and we put some on the screen. Some of the ones that I think we feel very good about around the data center
consolidation and some of the sort of the guts and the sort of back office, if you will, organizations over time coming together. Given our scale, we should get benefits from just a cost per trade or type of an operations-type number, being able to
run more efficiently on our scale platform the classic shared services dynamics to it. So theres really a lot of opportunity that we see in the combination.
And as James said, we are going to continue to invest in the products and the capabilities and the platform and the brand. So again, it was an attempt to try to look at
areas that wouldnt cause disruption to clients. Well be able to continue to provide innovative products, and we came up with the $400 million number, and we feel very comfortable with that.
Michael A. Pizzi - E*TRADE Financial Corporation - CEO & Director
I do not have much to add to that.
Michael Roger Carrier - BofA Merrill Lynch, Research
Division - Director
Okay. Thats helpful. And then just strategically, when you look at the trends in Wealth Management, whether its demographics,
technology, it seems like you having the adviser, the corporate and direct capabilities like all-in-one platform, that makes a ton of sense. Like culturally, it tends to
be a bit of a challenge, just in terms of like the high net worth versus like the direct. So when you guys think about like keeping your brand, but also from like a marketing, from an advertising and trying to like retain Morgan Stanley, but also
grow or you take advantage of the opportunity in the direct side with E*TRADE, like how do you balance that? Or how do you strategically try to migrate that?
James Patrick Gorman - Morgan Stanley -
Chairman & CEO
You know this company has come a long way. I was actually looking through some of our history on the weekend. And in 1972,
we only were a corporate finance house, and then we boldly decided to launch ourselves into the sales and trading arena, and somewhat reluctantly, I think if I read the stories back then, by 1977, 5 years later, 50% of our revenues were
Sales & Trading. And the big concern was, well Sales & Trading people are not the same people as banking people, and would we get over the cultural thing. In 1977, we made our first acquisition in Wealth Management, most people
dont know that, they think that Dean Witter was the first acquisition, in fact we bought a place named Shuman Agnew in 1977, and the CEO then said he thought within 5 years, we would be 25% Wealth Management. He was right on the 25%,
but it took see, Im not even sure I can count it, took 30 years to get there, 2010 not 1985. When we bought Smith Barney, people said you couldnt possibly integrate what was Legg Mason, E.F. Hutton, Shearson, all of the pieces
that made up Smith Barney and put it together with the old private wealth Morgan Stanley with the Dean Witter, , somehow, we managed to do that.
The commonality of
our businesses are were markets-placed businesses. Were all in the markets. When Mikes sitting on the operating committee, and were talking about whats going on in the prime brokerage business, he understands
that business. We all have a commonality of language, and I dont think, yes, were different we do different jobs, and yes, we have different backgrounds in some of our businesses. But honestly, there are so many different people
across our 60,000 employees now. Thats not an issue. One of the commonality is around our values, the culture of the organization, treating people to respect, giving back to our communities, the things that we share in common, thats
where youve got to find commonality. And the core of it on the business side is were a markets-based company. Mike?
Michael A. Pizzi - E*TRADE Financial Corporation -
CEO & Director
I think that was very well said. And I really dont have a whole lot to add. I think those are the elements of
culture. I think we share a lot of elements of culture. Maybe a little different in dress code, but outside of a few obvious ones, we share a lot of the core elements that matter.
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