Michael Kitces #FinTech

What's now and what's next for Morgan Stanley's new trade tool

Trade Flow Insights provides brokers with across-the-board product sales data and insights about those who bought them

May 17, 2013 @ 1:21 pm

By Davis Janowski

Morgan Stanley rolled out a new set of tools on its 3D platform this week — now available to all the firm's wealth management financial advisers.

Called Trade Flow Insights, the suite of tools is meant to help inform brokers about which of the company's products are proving popular and with whom, at least from a demographic perspective. In a nutshell, Trade Flow presents advisers with anonymized data on top product purchases, along with related information on the purchasers' asset allocations. And that data can be sorted based on asset class, client age and amount of client holdings.

Advisers can also look more broadly at a macro, firm-wide level, or, in future, advisers will be able to more easily correlate and compare findings to their own book of business.

“What I would say is, think of [Trade Flow] more as a form of social data sharing,” said Jeff McMillan, head of investment platforms at Morgan Stanley Wealth Management.

“Instead of me seeing your blog entries or likes and dislikes on a social network, we are providing the sum total of transactional data across the 3D platform, and we are then giving advisers the ability to filter and sort that aggregate behavior in different ways,” he said.

For now, Morgan Stanley intends to focus on getting the current system to a point where it can efficiently deliver the most meaningful data to advisers. In the months beyond, the firm intends to extend and enrich the tool's feature set toward more iterative ends — for example, being able to mesh the data described above with the firm's daily flow of 450 research reports produced by in-house analysts.

To accomplish that, Morgan Stanley is in the early stages of building an Insights Engine using an open source data management framework called Hadoop, which will be applied to, as Mr. McMillan puts it, “marry all that intellectual property together.”

The goal is to “take the best ideas in the firm and all this data and be able to present it in such a way [to inform] an adviser who has a hypothetical question, say, 'I have several clients between the ages of 55 and 65 with a lot of their holdings in alternative investments and a risk profile of moderate — what would be right for them?'” said Mr. McMillan.

The additional hope, according to Mr. McMillan, is to get even more value from the research the firm produces.

Instead of sending a given report to all 15,000 financial advisers, it can be more appropriately channeled to those whose clients have related holdings or a history of having had those holdings.

Alois Pirker, research director at the research consultancy Aite Group LLC, said he and his team had not yet been briefed on Trade Flow Insights but had seen the firm's Peer Insight and Advisor Insight tools and features.

“Quite frankly, I think these Insight tools are pretty unique in the industry and fit well with Morgan Stanley's goal of leadership in investment management being delivered through their advisers, and as such with these tools are aiming to empower them to do just that” he said.

Advisor Insights is an internal social network that was first introduced to a subset of wealth management advisers in 2010, but has since been rolled out to all advisers.

Mr. McMillan added that the underlying technology had also been used to create other internal networks as well, including one for the firm's managers and another for support staff.

Among several Morgan Stanley advisers contacted for this story, none had yet used the Trade Flow tools and one was unaware of their availability.

2012 was a rough year at Morgan Stanley, especially as it relates to technology. The firm's advisers routinely experienced outages and errors related to the combining of systems between Morgan Stanley and Smith Barney following their merger.

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