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Portfolio > Asset Managers

Morgan Stanley Undercuts Rivals With Robo

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Targeting younger investors, Morgan Stanley has launched its online platform, Access Investing, with an annual fee below those of its wirehouse rivals.

At 0.35% of assets under management per year, the program fee comes in below the Merrill Edge Guided Investing robo service, which charges 0.45%, and Wells Fargo’s Intuitive Investor offering, which has a 0.50% fee.

(Discount brokerages Schwab, Fidelity and Vanguard all charge less than Morgan Stanley for advisor-focused robo services: 0.28% for Schwab Intelligent Advisor, 0.30% for Vanguard Personal Advisor Services and 0.15% for Fidelity AMP. These fees don’t include expenses on the underlying funds.)

Like Merrill’s robo, Morgan Stanley’s has a $5,000 account minimum. The competing Wells Fargo service can be accessed with $10,000 or more of client assets.

“Morgan Stanley Access Investing leverages the firm’s intellectual capital to reach a broader audience of investors who are looking to achieve their financial goals,” said Morgan Stanley Chief Digital Officer Naureen Hassan, in a statement.

But the wirehouse firm, which recently left the Protocol for Broker Recruiting, sees the program as good news for its roughly 14,800 employee advisors, too.

“Morgan Stanley Access Investing is an opportunity for financial advisors to grow their book of business by making connections with prospects earlier and eventually establishing full-service relationships when clients are ready,” explained Hassan.

The robo portfolios include mutual funds and ETFs with both active and passive strategies. They also feature automated rebalancing and tax-loss harvesting at no additional charge, according to the firm.

Though the set service fee is 0.35% per account, clients “will incur fees and expenses related to owning shares of a [specific] fund,” which are not included in the advisory fee, says Morgan Stanley.

Rival Programs

Morgan Stanley’s robo offering comes one month after Wells Fargo introduced Intuitive Investor and 10 months after the Merrill Edge Guided Investing platform was introduced.

Over the past seven years, the broader Merrill Edge do-it-yourself offering has amassed over $165 billion in assets and 2.3 million accounts.

Merrill Edge clients with $20,000 or more in an account have access to a separate group of 2,100 advisors with whom they can work in person and roughly 1,000 they can interact with via call centers.

Wells Fargo’s Intuitive Investor hybrid product combines digital access to strategies from the Wells Fargo Investment Institute with the option of also consulting by phone with advisors from its financial services division, Wells Fargo Advisors.

Clients with $10,000 can access the service for a fee of 50 basis points, but existing clients with $25,000 in deposits or $50,000 in combined banking, brokerage and credit assets at the bank can utilize it for 40 basis points.

Wells Fargo’s robo offering, developed with SigFig, includes nine different portfolios, ranging from conservative income to aggressive growth, each consisting of eight to 14 ETFs and charging a typical fee of 15 basis points.

-- Bernice Napach contributed to this report.

— Check out Merrill Edge Exec: What New Technology Means for Clients on ThinkAdvisor.


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