Morgan Stanley on Wednesday reported higher-than-expected revenues and profits in the first quarter, lifted by its acquisition last spring of Smith Barney and by higher fixed income.

The number of advisors in its Global Wealth Management group at the end of the quarter was 18,140, flat from the end of 2009, while total client assets were $1.6 trillion, up 2.8 percent from the end of 2009. President and CEO James P. Gorman welcomed the improved results but added that “we still have a great deal of work to do.” Shares were up 4.9 percent just after noon to $31.95.

The company reported first-quarter net income of $1.8 billion on net revenues of $9.1 billion, compared with a net loss of $177 million on net revenues of $2.9 billion a year earlier. Continuing operations produced earnings of $1.03 a share, including 21 cents related to a tax benefit; analysts surveyed by Bloomberg News had estimated earnings of 57 cents a share.

Global Wealth Management contributed net income of $99 million on net revenues of $3.1 billion, compared to net income of $73 million on net revenues of $1.3 billion a year earlier. Net new assets were $5.8 billion last quarter, the highest level since the fall of 2008, Morgan Stanley said. Advisor turnover reached historic lows at the end of 2009, the company said. A year ago, before the Smith Barney deal closed on May 31, Morgan Stanley had 8,148 advisors. Last week Gorman wrote to shareholders that the company had hired more than 350 professionals for its sales and trading business.

The dropoff in advisor defections at Morgan Stanley mirrors that of Merrill Lynch, whose Bank of America parent said last week that advisor staff in the first quarter was flat at about 15,000. In a report out this week from Aite Group, senior analyst Doug Dannemiller said the brokerage operations of wirehouses are stabilizing. “Competing channels are still gaining market share from wirehouse firms,” he said. “The window of opportunity for these firms to further increase market presence is starting to close, however…It is important that these players fine-tune their capabilities in order to successfully compete with wirehouses after the dust from the crisis has settled.”