“There is a big pipeline of interested clients who are incredibly receptive to the idea of combining a best-in-class investment banking and institutional coverage regime with a best-in-class wealth management capability, all under a single contract, all on a single platform that can bring in assets and advise on assets held away, and that’s something that we’re really excited about,” Finn said.
The wealth management platform has been designed to hold multiple accounts, be tax smart about investments and withdrawals, and be risk aware, which makes it attractive for both advisors and investors, he said.
Not every client is ready for a full-service relationship right now. “And that’s totally fine, but by building relationships early, we think it increases the likelihood we will retain those assets when it’s time for them to consume that advice,” Finn added.
Finn said when the firm was putting together the E*Trade acquisition, the executives at the firm were concerned and said, “‘Well, you can’t touch our most active traders, because these are the ones who have driven all the economics and they self-selected to be at a self-directed platform, trading themselves.’”
But as it turns out, “as we’ve exposed them to the resources of Morgan Stanley, whether it’s access to best-in-class advisors or some of the differentiated products that E*Trade hadn’t had access to before such as donor-advised funds, the biggest users of this, the people who raised their hands and brought money over, were the active traders,” Finn added.
Just because you’re an active trader on a specific platform doesn’t mean you’re an active trader for life, the COO said.
The traditional notion that there are only static self-directed investors, validators and delegators doesn’t hold up over time, Morgan Stanley’s own research has shown, according to Finn.
Investors have different preferences for advice consumption and different risk budgets “and we need to be able to deliver all of it or someone else is going to. So, core to the strategy from a service perspective is to make sure we can meet clients where they are across the spectrum,” he said.
That makes Morgan Stanley Wealth Management a hard act to go toe-to-toe with, said Finn, who admitted analysts have a difficult time pigeonholing the firm at this point.
“Are we an investment bank? No, because we have a massive wealth management business. But we also have investment management capabilities that have grown significantly,” he said.
“I think if you put it all together, we’re in the advice business and we can provide advice to clients whether they’re institutional or individuals or governments. And there aren’t really any other firms that can match all our capabilities,” Finn said.