Morgan Stanley adds advisers during pandemic

Morgan Stanley adds advisers during pandemic
The wirehouse reports a net increase of 70 advisers during the summer, despite COVID-19
OCT 15, 2020

Morgan Stanley increased its financial adviser head count during the COVID-19 pandemic by 70 advisers in the three months that ended in September, an improvement that reflects better recruiting and less attrition among current advisers, who now total 15,469, the company said Thursday.

While the net increase in financial advisers over the summer represents less than 1% of the firm's total, it's a shift for Morgan Stanley, which has seen experienced advisers leave to join direct competitors or start their own registered investment advisers. Compared to last September, the firm reported a decline of 84 advisers.

Broker-dealers have also reported mixed success in bringing new advisers onboard during the pandemic, with obstacles like worries about travel often slowing down the recruiting process.

Morgan Stanley's pipeline for recruiting financial advisers in the near term looks strong, the company said Thursday morning on a call with analysts to discuss third-quarter earnings.

One analyst noted that the past three months marked the firm's best quarter in several years when it came to adding advisers.

"It’s hard to project, but the trend is definitely our friend," CEO James Gorman said during the conference call. "And if you look at the net recruiting numbers for the last several quarters, I think the gap has been closing and we’re now turning positive."

"We’re at an interesting inflection point in our businesses, it’s got great momentum," Gorman added.

Like Merrill Lynch and UBS, Morgan Stanley said a few years ago that it was moving away from relying on recruiting financial advisers from competitors and instead pushed its advisers to grab a bigger share of clients' assets held at competitors and introduced technology and planning tools as part of that effort. Recruiting advisers from competitors is extremely expensive but also essential in the wealth management industry.

Morgan Stanley's wealth management revenues totaled $4.66 billion in the third quarter, compared to $4.39 billion a year earlier. Revenue per adviser during the quarter was running at an annualized rate of $1.21 million, an 8% increase from the same time last year, when it was $1.12 million.

Morgan Stanley recently closed its acquisition of discount broker ETrade Financial Corp. and last week said it was buying fund manager Eaton Vance for $7 billion.

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