Morgan Stanley's broad new pipeline for clients

Morgan Stanley's broad new pipeline for clients
Recent acquisitions have created a "funnel" for new clients, said Jonathan Pruzan, the firm's chief operating officer. The company now has more than 14 million net relationships.
SEP 15, 2021

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."

Latest News

People moves: RBC taps Raymond James veteran for Texas complex
People moves: RBC taps Raymond James veteran for Texas complex

Meanwhile, DPL Financial Partners adds two annuity executives and Prime Capital Financial hires a Mid-Atlantic retirement plan consultant

Ex-LPL, special needs advisor pleads guilty in fraud case
Ex-LPL, special needs advisor pleads guilty in fraud case

Andrew Komarow pleaded guilty Thursday in federal court in Hartford to defrauding three financial services companies of close to $3.3 million.

Advisor moves: Raymond James lands $700M Truist team in Naples
Advisor moves: Raymond James lands $700M Truist team in Naples

Elsewhere, Cetera picks up a $210 million Connecticut team from MML, while Wells Fargo FiNet adds a San Diego family practice from LPL

Investor accuses Lasater Capital of hiding $100M in fund defaults
Investor accuses Lasater Capital of hiding $100M in fund defaults

Celebrity endorsements, $500M in claimed assets, and a state regulator stepping in.

American Express to make job cuts as AI revolution ramps up
American Express to make job cuts as AI revolution ramps up

“We needed to become a more agile and efficient organization,” said American Express CEO Stephen Squeri.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor