Morgan Stanley Hunkering Down on its Wealth Management Practice

Morgan Stanley

On 10/30 Morgan Stanley issued a press release stating they were “announcing a new talent investment strategy”.  This includes new technology solutions for their advisors, more events for their clients, and more programs for “Service Professionals”.  All lovely, and we’ll publish their full release below, but interestingly, they also buried in the press release that they would be exiting from “The Protocol for Broker Recruiting”, meaning there could be litigation if existing talent leaves their wealth management practice and somehow causes the firm to experience a resulting loss.  Sounds a little menacing to us, but then, they claim this protocol can be and has been gamed, and obviously they’ve seen enough.  Can’t blame them for taking a tough stance.  
(Cindy Taylor/Publisher)

NEW YORK–(BUSINESS WIRE)–Morgan Stanley (NYSE: MS) today announced new investments designed to empower financial advisors and their professional staff to strengthen client relationships and to drive further growth opportunities. Prioritizing investments in existing talent will enable Morgan Stanley to maintain its position as the leader in wealth management.

“With rapid technological change and evolving client expectations, we must stay ahead of the curve as a firm, and we must help our financial advisors do the same,” said Shelley O’Connor and Andy Saperstein, Co-Heads of Wealth Management at Morgan Stanley. “This requires a meaningful investment in our existing, exceptional talent and delivery of additional resources, capabilities and intellectual capital that will enhance performance and deepen client relationships.”

Highlights of the talent investments include:

  • For Advisors: Technology solutions that modernize advisors’ practices and help them build stronger relationships with clients. These include Goals Based Wealth Management tools and partnerships with cutting edge fintech providers to help eliminate time-consuming activities, and enable advisors to deliver more personalized insights to clients at scale.
  • For Service Professionals: Launch of the Achieving Client Excellence (ACE) Program, focused on three areas: (1) recognition of service professionals’ efforts to support key Firm initiatives including cash management and digital, (2) new professional development and communications programs and (3) technology solutions that automate or digitize manual processes, so more time can be spent serving clients.
  • For Clients: Additional events where clients can tap Morgan Stanley’s expertise and advice on complex and evolving issues, ranging from cybersecurity to estate planning.

These investments further the Firm’s previously stated commitment to reducing recruiting efforts in order to refocus those resources on existing talent. Accordingly, Morgan Stanley will exit the Protocol for Broker Recruiting (the Protocol).

The Protocol was instituted in 2004 to limit litigation among member firms by establishing a universal set of rules for Advisors to follow when leaving one Protocol member firm and joining another. However, over time the Protocol has become replete with opportunities for gamesmanship and loopholes: firms have opportunistically joined the Protocol to make a strategic hire and then dropped out; firms have invoked the benefits of the Protocol when hiring while using non-Protocol affiliates to circumvent the Protocol when they lose talent; and firms have unilaterally made exceptions to the scope of the Protocol, undermining the objective of a universal set of rules. In its current state the Protocol is no longer sustainable. Exiting the Protocol will allow the Firm to invest more heavily in its world-class advisors and their teams, helping drive additional growth opportunities.