With major and recent acquisitions in the rearview mirror, Morgan Stanley & Co. has multiplied its potential pool of wealth management clients by at least four times.
Some in the broad wealth management industry wonder if financial advisers at wirehouses like Morgan Stanley ever get their hands on a fresh group of clients in the wake of a large acquisition or building a new platform for investors who don't have the wealth, typically at least $500,000, to work with a wirehouse adviser.
Regardless, Morgan Stanley is clearly pleased with its pool of fresh clients. Morgan Stanley said in February 2020 that it was buying ETrade Financial Corp. for $13 billion in stock. A year earlier, it said it was buying Solium Capital Inc.'s stock plan business for $900 million.
Those two deals, as well as other recent acquisitions, have deepened the pool for wealth management clients at the firm, with the company saying it now has more than 14 million net relationships as compared to 3 million previously, according to an investor presentation on Tuesday.
"So, the ability for us to provide services for a much larger customer base is important," said Jonathan Pruzan, the firm's chief operating officer. "And that 14 million [of client] relationships have $8 trillion of assets held away."
"We manage about $4.5 trillion in our wealth business, and so even before getting one incremental customer, if we can get any share of that $8 trillion, that would be a huge home run," said Pruzan, who was speaking at the Barclays' Annual Global Financial Services Conference. "So, this is a funnel."
Both the ETrade and Eaton Vance Corp., which was also announced in 2020, deals "are exceeding expectations driven by underlying fundamental growth of those businesses," wrote Jason Goldberg, U.S. large-cap bank equity analyst at Barclays, in a note to investors late Tuesday.
Morgan Stanley "sees the self-directed channel as an important part of filling out the wealth management service models," Goldberg wrote. "It also has great scale in the workplace and is focused on making the investments it needs to capture opportunities in the future."
While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.
New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.
With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.
A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.
"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
