Morgan Stanley and its financial advisors reeled in $148 billion of new assets in the second quarter this year, with just over half that amount clients’ money linked to initial public offerings – IPOs – in the firm’s Workplace channel, the bank and wirehouse with roughly 16,000 financial advisors reported Wednesday morning.
“Growth led by Workplace relationships reflects a cornerstone of our client acquisition funnel,” said CEO Ted Pick in a conference call Wednesday morning with analysts and investors.
Morgan Stanley served as a lead underwriter for the record $2 trillion market debut of Elon Musk's SpaceX, a landmark IPO that was a part of the revival of activity in the U.S. listings market, according to Reuters.
Space Exploration Technologies Corp. – with the ticker SPCX - shares started trading a month ago at $135 per share and then almost immediately popped to a high of $225.64 before beginning to fall. On Wednesday afternoon, SPCX shares traded at $134.89.
Morgan Stanley’s Workplace channel is its employee benefits and stock plan administration business.
Morgan Stanley’s investment bank worked on other deals in the quarter; it was a lead underwriter on chipmaker Cerebras Systems Inc.’s IPO in May and a joint book-running manager on Alphabet's equity capital raise announced last month.
Morgan Stanley was co-lead underwriter for SPCX, reportedly generating $100 million in investment banking fees.
But the benefits of the SPCX IPO to Morgan Stanley were much wider than that. Wall Street analysts expected Morgan Staley to benefit from its role as stock plan administrator, converting SPCX employees into Morgan Stanley advisory clients.
“We've always talked about the Workplace channel,” said Sharon Yeshaya, chief financial officer, during the call. “We've talked about the fact, I think I said it in the last call, that IPOs can serve as a form of where we get [net new assets] and the top of the funnel.”
For the three months ending June 30, Morgan Stanley’s wealth management reported net revenues of $8.9 billion compared with $7.8 billion the same period a year ago, an increase of 14.1%.
Pre-tax income of $2.7 billion resulted in a pre-tax margin of 30.5%, the firm’s long-term target.
Meanwhile, Morgan Stanley in June increased yields on cash held in advisory account, two-and-a-half years after large firms began facing questions on whether they were short-changing clients on interest rates.
The bank and wirehouse raised deposit rates on investment advisory accounts to 3.6%, from 2.2% previously, according to a note from Steven Chubak, managing director of Wolfe Research.
Since 2023, large firms have been facing penalties and questions from regulators over interest rates for clients’ cash accounts.
Crewe Advisors' Ryan Halliday and Accelerated Wealth Partners' Eric Amar suggest mega RIA's readiness to integrate — not just scale — will determine whether an IPO exit actually works.
Frank Bisignano adds oversight of the child savings program as advisors weigh its place in family financial plans.
Inflation delays treatment while insured patients still fight for medication access
Public support grows for policies that spread AI’s financial gains beyond tech companies.
Investment banking fees rose 30% on a wave of IPOs and megadeals, led by the largest public listing on record.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
