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Morgan Stanley stock dips after CEO announced plans to retire in 2023

The Yahoo Finance Live team discusses Morgan Stanley CEO James Gorman announcing his plan to step down as CEO within the next year, the company's stock movement, and Gorman's impact at the company.

Video transcript

AKIKO FUJITA: Another major headline moving markets today, Morgan Stanley CEO James Gorman announcing he will step down within the next 12 months. Gorman is one of the longest serving heads of a US bank. And once his successor is installed, he'll move to executive chairman for a period of time to help with the transition.

And Seana, when you look at the move we saw in Morgan Stanley's stock today, that really points to the influence and the way in which investors have looked to James Gorman here. The stock down about 2 and 1/2% or just over that. He has been sort of the face of stability within the banking sector since he's taken the helm at in 2010.

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So it will be really interesting to see who that successor is going to be because especially in this environment, we have seen any kind of headline really moving. We're talking about big banks, not regional banks. But still, James Gorman, when you think about where he has been, he has been that face of stability within the sector.

SEANA SMITH: Yes, certainly, you can see the jitters there from investors, just on the news of this, even though it's not expected to happen for several months. When we're talking about who could potentially succeed him, there's three names that are being looked at right now.

But James Gorman, like you said there, Akiko, has really transformed the bank, turning it into a leader in the wealth management space when you take a look at some of the strategic acquisitions that he has made over the last several years, including Etrade, including Eaton Vance, clearly boosting that side of the business. It accounts for about 45% of the revenue in its most recent quarter. So Morgan Stanley without James Gorman, I think investors are a little bit nervous for exactly what that could maybe look like.