No matter where investors begin on the wealth management spectrum—as do-it-yourselfers, passive 401(k) investors, robo-advisor devotees or call center clients—Morgan Stanley Wealth Management wants them. Jed Finn, the firm’s firebrand chief operating officer, said that if he does his job properly, investors should end up funneling all or most of their assets into Morgan Stanley.
“If we don’t provide all of these options, someone else will,” Finn told attendees at the Next Chapter 2022: Rockin’ Retirement virtual conference on Tuesday. Next Chapter is a joint venture produced by Financial Advisor, the Execution Project and the Money Management Institute.
“Back in 2019, we thought the industry was moving toward consolidation and we wanted to be the consolidator, not the consolidated,” Finn said. “As a result of strategic consolidation and the capabilities we bought and built, we’re now sitting at just shy of $5 trillion as of first quarter 2022.”
“We can triple the size of the firm without adding a single new relationship. It’s a really exciting time for us because the growth opportunity in front of us has grown even faster than the asset base has,” added Finn, who said Morgan Stanley has gone from 2.5 million clients to 15 million relationships from across all age and wealth levels, people attracted to the wealth management broker-dealer’s different service models.
The wealth management B-D, which garnered $438 billion of net new assets last year, is parlaying the value of all its acquisitions—including E*Trade, bought in 2020, and Solium, a stock plan administration business it acquired in 2019—to nudge clients at all levels of wealth toward its advice offerings.
With a firm belief that the future of wealth management is a marriage of the best-in-class technology and best-in-class advice, the firm’s goal is to support all aspects of the advisor and investor relationship.
On the workplace retirement plan side, Morgan Stanley has added over 700,000 new corporate plan participants in 2021.
“We think of this as a big asset acquisition funnel,” Finn said. “That starts either in the workplace or with the self-directed investor on the E*Trade platform, but ultimately is designed to end up in a full-service advice relationship.”
Before the Solium acquisition, Finn said Morgan Stanley had heard from companies that loved its advisors, but thought the firm’s retirement plan software was lagging that of competitors. He said company executives told him, “‘We love what you’re doing, but if you don’t fix it, it’s going to be hard for us to continue to partner with you.’”
Solium’s Shareworks platform now provides a cloud-based solution that creates a convergence of wealth management and full-capacity defined contribution plan options. “It’s generating extensive new net assets, and we’re still in the process of integrating all these pieces,” Finn said.
The firm also recently formed partnerships with Empower Retirement and Vestwell, both in the retirement plan record-keeping business, and Wilson Sonsini, a law firm that specializes in private company investments. The marriage of these services with workplace retirement plans and wealth management services creates a map “that leads back to our asset funnel,” Finn said.
Beyond the workplace market and the E*Trade platform that serves self-directed investors, Morgan Stanley also provides a digital advice offering and a remote advisor model. High-net-worth clients can work with advisors, while ultra-high-net-worth clients get personal wealth advisors who specialize in the market of households with $20 million or more. And for families with a hundred million to a billion-plus, Morgan Stanley launched a family office offering two years ago that has grown from $0 to $25 billion in two years.