Smokin’ hot Q4 at Morgan Stanley

Morgan Stanley has floated its way to the top.

James Gorman’s bank reported its best-ever quarter for its core business, wealth management, buoyed by a huge client base investing in a stock market that just doesn’t seem to ever go down.

Morgan Stanley reported $4.4 billion in revenue from wealth management during the fourth quarter — about half of all the moneyit brought in that period — and up 10 percent from the same time the year before.

Thebank’s total profits were $686 million — affected by expected one-time costs stemming from changes to the tax bill, which has distorted earnings at all major banks. Without that, the bank would have made $1.67 billion in profit — 8.6 percent better than a year earlier.

The report came the day after investors drove up Morgan Stanley’s market cap above $99.4 billion, higher than its traditional rival, Goldman Sachs — a symbolic changing of the guard as Wall Street continues to struggle making money in trading.

Wealth management was also buoyed by $41.2 billion in securities-based and other loans, the most ever, a risky form of debt that has exploded as the stock market has risen.

Shares gained 49 cents Thursday, to $55.84.

Last year, the bank settled with Massachusetts for $1 million over sales contests pushing the loans.