In a conference call with analysts, Morgan Stanley Chief Executive Officer James Gorman said clients are being cautious while waiting for the Federal Reserve to raise interest rates. Brokers also had two fewer days to collect assets than in the fourth quarter, but fees and commissions also fell 4.6 percent from last year's first quarter.

By other measures, Morgan Stanley said its wealth strategy thrived. Revenue rose 6 percent from a year ago to a record $3.8 billion, while expenses increased 2 percent, reflecting a new policy of deferring more bonuses for brokers and paying them less to sell loans than to manage investments. Portfolio-backed loans grew 40 percent and residential mortgages were up 53 percent from a year earlier.

Average revenue per broker rose 9 percent on an annualized basis to $959,000 as it weeded out less productive brokers. It ended the quarter with 15,915 representatives, down 161 in the quarter, and was the first time the total fell below 16,000 since it began buying Smith Barney in 2009. A spokesman did not say how many departing brokers Morgan Stanley tried to retain.

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