James Gorman is making good on his promise to squeeze more out of wealth management at Morgan Stanley, and the brokerage units quarterly performance contributed to the bank's better-than-expected results, released Friday.

The wealth managment unit's profits jumped 26 percent in the last quarter of the year to $709 million, while revenue increased 12 percent, to $3.7 billion compared to the same quarter in 2012, largely on new assets and a rising equity market. Morgan Stanely earns more money from wealth management than investment banking services.

The brokerage division's performance also benefitted from completing the integration of Smith Barney by acquiring Citigroup's share in June.

Overall, the bank's revenue climbed from $7 billion to $7.8 billion in the fourth quarter, while profits fell from $568 million to $133 million.

The wealth management unit's pre-tax margins met management's goal of 20 percent, excluding a one-time charge. In a presentation accompanying the release, Morgan Stanely put a margin goal of 22 to 25 percent in the next two years.

Morgan Stanley added a net 104 advisors during the quarter from the 16,456 advisors reported at the end of September. "Attrition rates continue to be low," says CFO Ruth Porat. Morgan Stanley reported advisor productivity also increased, with annualized revenue-per-rep at $905,000, up from $848,000 last quarter and the $813,000 reported a year ago.  The average client assets per financial advisor reached $116 million last quarter.

Client assets reached a record $1.9 trillion, which Porat said reflected higher market levels. Additionally, 37 percent of total client assets are fee-based, with fee-based client assets hitting $697 billion last quarter and fee-based asset flows of $51.9 billion for the year.