Morgan Stanley’s latest financial results show its wealth management unit reporting pre-tax income of $668 million for the third quarter ending 30 September 2013, a 63% increase from $247 million in the same period last year.

Morgan Stanley’s wealth management business, which recently took full ownership of Smith Barney Holdings (MSSBH) from Citigroup, had set a strategic target of 20% pre-tax margin when the merger was first announced, but later said 15% was a reasonable goal until markets fully recovered. (Without that deal, the margin would have been 13% last year).

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Total client assets were $1.8 trillion at quarter end. Client assets in fee based accounts of $652 billion increased 22% compared with the previous year, the bank reported.

Net revenues for the current quarter were $3.5 billion compared with $3.2 billion.

Commenting on the promising outcome, James P. Gorman, Morgan Stanley’s chairman and CEO, said: "Our results point to the increased consistency, strength and balance we are deriving from our business model. Our strategy to combine a world class investment bank with the stability of the largest U.S wealth management franchise and strong investment management is enabling us to deliver exceptional advice and execution for our clients as well as stronger returns for our shareholders."

The banks’ investment management division reported pre-tax income of $198 million for the third quarter of 2013, up 78.2%, compared with $43million for the same period last year. The quarter’s pre-tax margin was 36%.

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Overall, Morgan Stanley reported a 49% net revenues growth of $7.9 billion compared with $5.3 billion a year ago, but slightly fell 7% from $8.5 billion in the second quarter of 2013.

The bank’s net income fell to $888million, or $0.44 per diluted share, from $980million, or 41 cents a share, in the previous quarter.