A robo-adviser may be in the works for Morgan Stanley

Wealth Management President Gregory Fleming says a digital platform could attract younger clients to the firm

Oct 21, 2015 @ 4:24 pm

By Alessandra Malito

Morgan Stanley may be eyeing its own robo advice platform.

During the Money Management Institute fall conference on Wednesday, Morgan Stanley Wealth Management President Gregory Fleming hinted at a future digital offering, which would foster a quicker onboarding process and attract younger clients to financial services.

“Technology is pushing in ways we've never seen before,” he said.

A spokesman at Morgan Stanley said the firm would not comment or elaborate further.

Mr. Fleming said robo-advisers are revolutionizing the industry, bringing a new interface to clients but not providing strong advice on the back-end. He said there is a shift toward more goals-based planning, and that advice — as well as financial advisers — will always be needed.

A digital platform, however, provides firms the ability to offer differentiated services, with a tiered fee structure. It's a good way for clients to get started planning their finances, while also allowing advisers to capture long-term clients.

The hope for Morgan Stanley, as well as any other advisory firm that has a robo platform, is that eventually the client will need more complex planning, and migrate over to a full-service financial adviser.

More firms are starting to take robo-adviser platforms seriously. Charles Schwab & Co. launched Intelligent Portfolios, a retail robo-adviser, and Institutional Intelligent Portfolios, the adviser-facing version, in March and June, respectively. Vanguard rolled out their hybrid model Personal Advisor Services, which was in beta for two years, in May. BlackRock picked up business-to-consumer robo-adviser FutureAdvisor in August.

“It will just be the standard,” said Craig Iskowitz, chief executive of Ezra Group, a technology consulting firm in the financial advice industry.

In particular, Mr. Fleming said the robos will attract millennials, who have come to expect high-level technology services. Their first instinct, he added, is not to go to a traditional financial adviser's office, whether their parents do or not.


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