All three channels working on the back of increased transaction activity and new issues and the like. We should slowly and durably work our way back to 30% The efficiency ratio, as you know, is just another way of saying 30% margins for the enterprise. Now by definition, the investment bank which has more capital and more underlying risk should have margins that exceed 30% over time. So it’s fair to say that if we’re hitting 30% margins in Wealth Management, we certainly should be at an enterprise efficiency ratio of 1 minus 70%, 30% as well. So 30% plus could be a way of thinking about it, but I wanted to set up numbers where the team knew that they are specific and that we needed to hit them. And then finally, with respect to returns on capital, this gets to the importance of our being stewards of that capital, what we pay out in the form of dividends, what we buy back and durably how we run the place.
So we thought that 20% ROTCE which is something we hit during the COVID years. But of course, those were against macroeconomic conditions, which were unusual and highly favorable that we can do 20% in a normalized environment. So this may be on the margin and James liked it too, when we talked about it, stylistically, my view was and the team shares it that 10 trillion of client assets, we should get there and just keep on going. But the other three, effectively in removing the pluses, it’s simply reaffirming that those numbers will be hit. We will hit 30% pretax margins in wealth, 70% efficiency ratio for the firm and 20% ROTCE. It will take time. It will be the challenges you would expect in making that happen. And of course, we need economic conditions to line up in a favorable way.
But over time, those are the firm-wide goals, and we wanted to be very specific about that for you.
Operator: We’ll take our last question from Mike Mayo with Wells Fargo Securities. Please go ahead. Your line is now open.
Mike Mayo: Okay. Well, it looks like you have a heavy lift after following James [indiscernible]. What is your message to the wealth managers and investment managers at half of the company that you haven’t run in the past. So you’ve proven yourself in half the company, that’s clearly capital markets and Wall Street banking. But what’s your message to the other half of the company at a time when they’ve had a step down in their — the growth rates, new asset flows on wealth and outflows in investment management.
Ted Pick: Well, thanks for the question, Mike. The Wealth business is actually in my blood. My dad and my father-in-law were both brokers once upon a time, and I grew up studying that business as a kid. And I think it is absolutely that, which is differentiated on Morgan Stanley during this 15-year period. The ability to integrate Smith Barney and build out something that’s truly special is — has been existentially, as you know better than most, but also thematically exactly what the firm as needed. In no way has it actually worked to the disbenefit of the investment bank. As you know, the history of our — of our merger ’97 was largely about social issues, but the industrial idea wasn’t necessarily off at all. to build a world-class wealth manager would be something that would have enormous barriers to entry and have run well and run their first-class way to deliver value to clients in a differentiated manner.
And what we have done, thanks to the leadership of Andy Saperstein with Jed Fin and then the investment management business with Dan Simkowitz now moving over to the Investment Bank and [Ben Huneke] and [Jacques Chappuis] running investor management today is we’ve got effectively the full funnel. We’ve got the soup to nuts self-directed the traditional advisory channel and this new channel workplace are working as one. I’ve spent time working some of the chairman’s and hitting a branch here in Midtown and spending some time with folks that are actually making the engine work. And I think it’s fair to say that We, at one point, we’re calling the wealth and investment management business, the ballast, which was the right word because we wanted to convey durability, but I’d submit to you, Mike, and hopefully, you’ll appreciate spirit of which I say this, I think it’s actually the engine.
I think this will be the engine for further Morgan Stanley growth. If opportunities were to come before us in the years to come, of course, we could staple them on and do something inorganically. As James alluded to, perhaps that would be outside the U.S. where I spent a whole bunch of time but in running the actual organic business as it currently stands, we are truly a group of one. And as you know, having spent time inside the knitting of MS what we’re most excited about, Mike, you as a student of corporate culture and these investment banks, I think what you’d be most excited about is just how well we all get along. There is a zero friction in the leadership ranks across infrastructure, across wealth and investment management and across the investment bank.
So the beauty of where we are today, is that all of us as shareholders and custodians of the Morgan Stanley idea and the Morgan Stanley culture of first-class business in a first-class way are very much focused on growing both pieces of the firm and is leading wealth and asset manager has a lot more room and will grow, as I said, to the $10 trillion of assets. And at the same time, I don’t see any reason why we can’t continue to pick up high-quality durable wallet inside the investment bank and generate operating leverage in that business, too.
Operator: That concludes our question-and-answer session for today. Ladies and gentlemen, this concludes today’s conference call. We thank you again for participating. You may now disconnect, and have a great day.
