Morgan Stanley and Citigroup have confirmed the formation of a wealth management joint venture and said they intend to make more than $1bn ($758m) in cost savings, including $320m in personnel expenses.

James Gorman, co-president of Morgan Stanley, will be chairman of the new company while retaining his current role. Charles Johnston, most recently president of Citigroup's global wealth management business in the US and Canada, will be president of the combined effort to be called Morgan Stanley Smith Barney.