Morgan Stanley’s global wealth management group finally raised its pre-tax profit margins in the third quarter, which climbed to 11 percent from 9 percent. Morgan CEO James Gorman has been talking about raising margins for many quarters, without results.

The group has been very focused on cost control, and FA headcount declined by 300 to 17,291 in the quarter, which reflects efforts to cull out lower end advisors, said chief financial officer Ruth Porat on a conference call. And yet, annualized revenue per advisor dropped to $747,000 in the third quarter from $785,000 in the second quarter. The division hauled in net new assets of $15.5 billion, the highest level since the joint venture between Morgan Stanley and Smith Barney was inked. Total client assets hit $1.6 trillion at quarter end, with average assets per FA at $90 million.

Gregory Fleming, who heads up the wealth management business, is very focused on expense management, said Porat on the call. “He has focused on reducing lower productivity FAs, which brings with it incremental cost saves.” Turnover in the top two quintiles was at its lowest since the inception of the joint venture, said Porat.

Net flows into fee-based accounts totaled $10.1 billion, bringing year-to-date net fee-based asset inflows to $37.6 billion. Total net fee assets are $456 billion, up 6 percent versus the year ago quarter. Third quarter net revenues for the global wealth management division came to $3.3 billion, versus $3.1 billion in the year ago quarter. Pre-tax income for the quarter jumped to $362 million from $281 million in the third quarter of last year.

The global wealth management division “demonstrated revenue stability in the face of challenging market conditions,” said Morgan Stanley Chief Financial Officer Ruth Porat on the earnings conference call. In a seasonally slow quarter, higher asset management revenues were primarily driven by asset levels at the beginning of the quarter, she added. Declines in revenues from other sources were due to fewer gains from the investment portfolio, she said.

Integration costs came to approximately $90 million in the quarter, and the integration seems to be proceeding apace. “We are pleased with the progress of the integration,” said Porat. The firm has moved all Morgan Stanley FAs onto its new technology platform and will be able to move Smith Barney guys onto that platform earlier next year than planned.

Overall, Morgan Stanley reported income of $2.2 billion, up from $314 million in the year ago quarter. Net revenues totaled $9.9 billion for the quarter, up from $6.8 billion a year ago.