Morgan Stanley considered appointing a high-level asset manager to reverse fortunes at its funds arm and briefly considered exiting the business altogether, according to an analyst report, but the bank has reconsidered in favour of a strategic overhaul.

Roger Freeman, an analyst at Barclays Capital, met with James Gorman, co-president of Morgan Stanley and chairman of the Morgan Stanley Smith Barney brokerage joint venture, which closed last month. Gorman has ultimate oversight of Morgan Stanley Investment Management.