What You Need to Know
- Morgan Stanley is being very careful with its integration of the workplace solutions businesses of his firm and E-Trade.
- E-Trade and Eaton Vance have performed better than Morgan Stanley's models had projected before acquiring them.
- Morgan Stanley's CEO wants to see pretty much all the firm's U.S. employees back to their offices by Labor Day.
The integration of E-Trade into Morgan Stanley is “going very well” overall, but the one component that is “most complicated” is the workplace solutions businesses of the two companies, according to James Gorman, Morgan Stanley CEO.
That is because there are three platforms being combined, he told the online Morgan Stanley U.S. Financials, Payments & CRE Conference on Monday. Morgan Stanley was already integrating its operations with those of Solium Capital, the stock-plan administrator it acquired in 2019, ahead of its acquisition of E-Trade that was finalized in October, he noted.
“The last thing we want to do is create a bad client experience for those on one platform or the other,” he explained. “So we’re going to be very careful in the integration of that.”
Other than that, the Morgan Stanley/E-Trade integration is going smoothly, according to Gorman, who pointed to his company’s announcement last week that it shifted several E-Trade senior executives to its wealth management leadership team.
Meanwhile, it’s still “early days,” he said, for Morgan Stanley’s integration with Eaton Vance, which his company also acquired last year.
So far, “Eaton Vance has performed better than our models predicted going into the deal,” as has E-Trade, he pointed out.
Earlier in the day during the conference, Andy Saperstein, Morgan Stanley co-president, said: “We now have the ability to source new client relationships through the workplace and through E-Trade’s self-directed platform. We can not only reach out to the end client directly, but this also provides a much more effective way to reach younger clients earlier in the wealth accumulation phase of their lives.”
In addition, “what E-Trade brings to the table is clear,” Saperstein said, noting his company has added more than 5.5 million new self-directed customers to its platform through the acquisition.
Gorman said he expected that most of the firm’s U.S. employees would return to their offices by the fall.