Morgan Stanley's global wealth management division added $14 billion in net new client assets during the fourth quarter, bringing the division back on track to meet ambitious growth targets set by Chief Executive James Gorman.

The division, which includes a 51 percent stake in the brokerage giant Morgan Stanley Smith Barney and a business serving high-net-worth investors, posted net income of $272 million, up 68 percent from a year earlier.

Morgan Stanley retained a net $166 million of that profit, with the remainder going to joint venture partner Citigroup Inc.

The quarter marked an upturn in the brokerage's performance, which has been largely disappointing since Morgan Stanley and Citi combined their wealth businesses in May 2009.

Revenue rose 7 percent to $3.4 billion, thanks largely to higher commissions earned as clients jumped back into the markets. The unit also realized higher net interest income.

Morgan Stanley's ranks of financial advisers continued to fall, down 76 advisers during the fourth quarter to 18,043 worldwide. But its advisers were more productive, generating an average of $742,000 in annualized fees and commissions, up 8 percent from the third quarter.

The pre-tax profit margin, another key measure for the bank, rose to 12 percent from 7 percent a year ago. Gorman previously set a target of $50 billion in net new assets this year and a pre-tax profit margin exceeding 20 percent.

The firm continued shrinking it branch network, closing 16 retail offices during the quarter. It now has 851 branches.

(Reporting by Helen Kearney; editing by John Wallace)