Morgan Stanley creates its own robo-adviser

Wirehouse also plans to give the digital-advice platform, Access Investing, to its team of human financial advisers as a tool to connect with younger investors

Dec 4, 2017 @ 1:04 pm

By Bloomberg News

Morgan Stanley is trying to get down with the kids.

The banking and wealth management powerhouse is starting a new digital investment platform for clients with as little as $5,000 to invest, according to a statement from the company on Monday.

Morgan Stanley Access Investing will charge $3.50 a year for every $1,000 of assets under management, the statement said. Clients can choose from a range of strategies, including a mix of ETFs that aim to track the market, a core portfolio of ETFs and mutual funds, and thematic strategies including sustainability and gender diversity.

Portfolios will be guided by Morgan Stanley's own investment experts and research, and feature a combination of active and passive investment strategies.

Like other robo-advisers, Access Investing will automatically build, monitor and rebalance portfolios. The product also will feature tax-loss harvesting, online account opening and mobile check deposit.

While other wirehouses like UBS and Wells Fargo have partnered with third-party vendors to build a digital-advice product, Morgan Stanley said it built Access Investing entirely in-house using proprietary goals-based wealth management technology.

With as much as $30 trillion in wealth estimated to transfer from baby boomers to millennials over the next few decades, traditional broker-dealers such as Morgan Stanley are looking to engage with the next generation. Many younger investors so far have steered away from their parents' financial advisers, preferring the low- or no-touch programs offered online by robo-advisers.

The bank plans to give Access Investing to its team of human financial advisers as a tool to connect with younger investors and build a pipeline of next-generation clients. Morgan Stanley will combine technology and human advisers in its new platform, and will look to increase its involvement with clients as they get older and their needs evolve.

This "is an opportunity for financial advisers to grow their book of business by making connections with prospects earlier and eventually establishing full-service relationships when clients are ready," Naureen Hassan, chief digital officer at Morgan Stanley Wealth Management, said in the statement.

Access Investing is especially geared toward millennial investors, a demographic Morgan Stanley said is particularly interested in socially responsible investing. The company said its research found millennials were twice as likely as older generations to invest in a fund if social responsibility is part of the value-creation thesis.

"Our analysis has shown that the next generation of high-net-worth individuals is looking for more than traditional portfolio allocation," said Lisa Shalett, head of investment and portfolio solutions at Morgan Stanley Wealth Management. "By offering a diverse set of portfolios, we are enabling our clients to invest in what they believe."

InvestmentNews reporter Ryan W. Neal contributed to this story.

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