Morgan Stanley’s chief operating officer believes that the E*Trade and Eaton Vance acquisitions have allowed the firm to expand offerings to existing wealth management clients and make sure more of them stay with the firm, as the business plays an increasingly integral part in the overall firm’s performance.
The E*Trade deal was aimed at finding synergies, but more importantly at being able to provide incremental products and services for Morgan Stanley’s existing client base, Jon Pruzan said at the annual Morgan Stanley European Financials Conference on Wednesday, according to a Seeking Alpha transcript of the conference session.
To that end, according to Pruzan, Morgan Stanley has been “deliberate” about integrating the two platforms in a way that would ensure no interruptions in service.
Moreover, the wirehouse has been focused on ensuring that it can tap E*Trade — along with Solium and Shareworks — to keep workplace client relationships it previously may have lost when the clients’ shares vested, Pruzan said, according to the transcript.
Pruzan added that the firm still has “a little bit more work to do on the integration mostly in the middle and back office,” according to the transcript.
Morgan Stanley’ acquisition of Eaton Vance, closed last year, meanwhile, brought the wirehouse customization capabilities, which, when combined with Morgan Stanley’s alternatives and concentrated equities platform, resulted in “a much more balanced and complete set of products for our clients and services,” according to Pruzan.
"We're now obviously going through the process of trying to integrate that client experience. So whether you're an FA client or workplace client or self-directed client having that sort of consistent feel to your client experience, and we're making progress on that," Pruzan said.
"[O]ne of the things we've talked a lot about is the companion account. In the old days if you are a Morgan Stanley workplace client when your shares vested we called you and said, 'What do you want to do with your stock or your proceeds?' So it left the building. So we’ve been putting with Solium and Shareworks and now with equity edge and E*Trade, we've been putting [a] companion account, so we don't have to chase back the client relationship. It lands in a Morgan Stanley account and then we can provide services for that," he added.
Pruzan also said that the wirehouse has been able to drastically reduce the number of advisors leaving the firm, from around 20 per week in the wake of Morgan Stanley’s Smith Barney joint venture with Citi, closed in 2009, to no more than what you can count on “one hand, if that,” according to the transcript.
Pruzan attributes the lower attrition in part to the growing popularity of advisor teams at Morgan Stanley, according to the transcript. He also says that the teams that are coming in are “significantly bigger and better” than the ones that are leaving, according to the transcript.
Meanwhile, Morgan Stanley’s workplace and self-directed channels act as a “funnel” for new clients, Pruzan said, adding that the company has been deepening those relationships with companion accounts and financial wellness and education, according to the transcript.
Pruzan also said that “the breadth and scale” of the firm’s U.S. wealth management business “will be very important to our ultimate stability and success as a firm,” according to the transcript.
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