Morgan Stanley reported a year-on-year rise in the pre-tax income of its wealth management arm in the second quarter of this year.

Morgan Stanley Global Wealth Management logged pretax income from continuing operations of $393 million for the second quarter of the year, up from $317 million for the same period in 2011.

Aggregate pre-tax income, which included the pre-tax gain in discontinued operations related to the sale of Quilter (the firm’s UK subsidiary), was $420 million after the non-controlling interest allocation to Citigroup.

Total global wealth management client assets at the Wall Street titan stood at $1.7 trillion at quarter-end, flat on a consecutive basis, with around 31 per cent in fee-based accounts. Morgan Stanley said it saw global fee-based asset flows for the quarter of $4.1 billion.

Net revenues in Q2 were $3.3 billion at the unit, down from $3.4 billion a year before. The quarter’s pretax margin was 12 per cent, the firm said. Asset management fee revenues rose from $1.8 billion a year ago to $1.9 billion, bolstered by a rise in fee-based assets.

Non-compensation expenses declined from $991 million a year ago to $918 million in Q2. Compensation expense for the quarter was $2 billion, with a compensation-to-net-revenue ratio of 60 per cent.

At June 30, the firm had 16,934 representatives in its global wealth division, with average annualised revenue per global representative of $775,000, and total client assets per global representative of $101 million.

Across its businesses, Morgan Stanley reported income from continuing operations of $563 million, compared to income of $1.2 billion for the same period a year ago.