What's going on?

Those retail investors Morgan Stanley�s been picking up have a real kick to them: the investment bank announced better-than-expected results on Wednesday.

What does this mean?

After tearaway earnings from JPMorgan Chase and Goldman Sachs in the last week, expectations for Morgan Stanley were high. But the bank duly knocked them out of the park: its bottom line got a boost from the surge of investors who piled into the pandemic-shaken markets, as well as from the sheer number of initial public offerings it was paid to advise on. Its wealth management division � which looks after money for the uber-rich and tends to be the most stable of its businesses � did better than expected too. That might�ve come as a relief to investors: it accounts for a massive 42% of its revenue.

Why should I care?

Zooming in: Me, me, me*trade.

One reason the bank�s wealth management business is doing so well is E*Trade � the retail trading platform Morgan Stanley acquired in February last year to compete with the likes of Robinhood. Retail trading is big business right now, and it�s easy to see why: the stock market�s high-profile hardships last year suddenly turned everyone � maybe even you � into an armchair investor.

The bigger picture: Bank eat bank.�

Morgan Stanley says that the bigger its wealth management business grows, the more profitable its overall business should become. And since that segment�s on the up and up, the company just upped its long-term �return-on-equity� target � a key metric used to judge banks� profitability � from 15-17% to more than 17%. That�s a subtle shift, but it puts the bank at the upper end of Goldman Sachs and JPMorgan�s own projections � which could make all the difference to investors.