Big wealth managers know that one of the best ways
A customer who has just a brokerage account with a firm can
According to a recent internal memo, Morgan Stanley is setting up a new organization called Wealth Management Client Solutions. Leading it will be
The memo said the firm has been investing heavily in all aspects of its wealth management business "in order to build new relationships at scale, with the goal of migrating those relationships to our Financial Advisors over time."
The memo, attributed to Morgan Stanley head of wealth management Jed Finn, adds: "Now, at 18 million relationships and growing, we need to ensure that we are meeting clients wherever they are on their advice journey, supporting their growth, and deepening relationships over time."
A spokesperson for Morgan Stanley confirmed the 18 million figure encompasses advisory clients, self-directed investors who trade through Morgan Stanley and clients of the Morgan Stanley at Work program, which deals with employee benefits.
READ MORE:
She said Morgan Stanley has enjoyed particular success with clients of Morgan Stanley at Work eventually moving over to dealing directly with advisors.
"In the prior three years, we saw an average of $50 billion of workplace assets migrate to the advisor-led channel on an annual basis," Yeshaya said in the earnings call. "This year, client migration was up 25% year-over-year despite economic headwinds. And on the product side, our financial advisors are offering clients investment opportunities such as private credit, private equity and all the other alternatives."
Making them 'stickier'
"It makes clients stickier," Terrana said. "That's what it's for."
The creation of the Wealth Management Client Solution group wasn't the only organizational change announced in Morgan Stanley's memo. The firm also said Chad Turner, who had overseen the self-directed business, was being named head of Wealth Management Platforms. The new role will have him working to simplify and unify technologies and systems used in Morgan Stanley's advisory, self-directed and workplace businesses.
And Lisa Shalett, the chief investment officer of the wealth management division, will begin reporting to Saperstein and will take on additional responsibilities related to making sure the firm's research is available to all its clients.
"In all macro environments, and especially in periods of market change, delivering research and broad planning strategies is critical for helping clients achieve their financial goals," according to the memo.
Change at the top
Morgan Stanley's reorganization of its wealth management unit comes amid sweeping changes in the firm's upper ranks.
READ MORE:
That top spot
Media rounds
Doing his first round of media interviews since his promotion, Pick on Thursday said he largely plans to stay the course charted by Gorman. In an
Pick told Bloomberg that one of his priorities is to further integrate the two sides of the business.
"We'd like to think we're differentiated from any of our competitors," Pick said. "We have competitors that are great wealth managers. We have a great investment bank. But to bring them both together is something special."
As an expert in financial services and wealth management, my extensive knowledge allows me to provide insights into the recent reorganization at Morgan Stanley and its implications for the industry. Let's break down the key concepts used in the article:
-
Wealth Management Client Solutions:
- Morgan Stanley is establishing a new organization called Wealth Management Client Solutions.
- Vince Lumia, the current head of field management, will lead this organization.
- The goal is to build new relationships at scale and migrate those relationships to the firm's financial advisors over time.
-
Strategic Importance of Multiple Business Relationships:
- The article emphasizes the strategic importance of having multiple business relationships with clients.
- Firms, like Morgan Stanley, aim to make clients "stickier" by offering a range of services such as brokerage accounts, mortgages, and bank accounts.
- Clients with diverse business dealings are less likely to move their assets elsewhere, providing stability to the firm's advisory teams.
-
Morgan Stanley's Investment in Wealth Management:
- The firm has been investing heavily in its wealth management business to build new relationships at scale.
- The memo mentions that Morgan Stanley has 18 million relationships and is focused on meeting clients at various stages of their advice journey.
-
Client Growth and Migration:
- According to the memo, Morgan Stanley added 600,000 new relationships in 2023, bringing the total to 18 million.
- The firm has seen success with clients of Morgan Stanley at Work transitioning to dealing directly with advisors.
- Workplace assets migrating to the advisor-led channel increased by 25% year-over-year.
-
Organizational Changes:
- Alongside the creation of Wealth Management Client Solutions, other organizational changes were announced.
- Chad Turner, who oversaw the self-directed business, is named head of Wealth Management Platforms.
- Lisa Shalett, the chief investment officer, will have additional responsibilities related to ensuring the firm's research is accessible to all clients.
-
Industry Recruitment Challenges:
- The article mentions that top advisory teams are being heavily recruited by industry rivals or are opting for independence.
- Firms with diverse business dealings are seen as running a good defensive play to retain talent.
-
Integration of Business Divisions:
- Chad Turner's role involves simplifying and unifying technologies and systems used in Morgan Stanley's advisory, self-directed, and workplace businesses.
- The firm's top executive, Ted Pick, expresses the priority of further integrating the global investment bank with the world-class wealth management business.
-
Continuity and Leadership Stability:
- The reorganization is likely intended to provide continuity and ensure the firm can retain its top talent.
- This move follows recent changes in the upper ranks of Morgan Stanley.
In conclusion, Morgan Stanley's reorganization reflects a strategic approach to enhance client relationships, strengthen advisor-led channels, and ensure the integration of diverse business segments within the company. The firm's focus on continuity, leadership stability, and the integration of its investment bank and wealth management business are key themes in this transformative initiative.