Trout told that in the wake of the Schwab-TD Ameritrade deal, he sees this deal as somewhat similar to what Goldman has done in buying United Capital. Will Trout, head of wealth and asset management at research firm Celent, said that Morgan Stanley's move was likely a bid to diversify the company’s offerings into the custody business and become a true one-stop financial shop for a spectrum of investors from mass affluent to high net worth. Last year, competitor Wells Fargo recognized the growth, and its subsidiary First Clearing partnered with TradePMR to launch a dedicated offering for fee-only RIAs.Īnd last year, another big Wall Street firm, Goldman Sachs, made a bigger bet on independent advice, with its acquisition of United Capital. You couldn’t blame Morgan Stanley for wanting to keep advisors in-house. And yet, more advisors and clients are choosing the independent advice channel it’s the fastest-growing channel in wealth management. “We see significant growth potential in the RIA business, and today, this just increases the amount of capabilities we're going to be able to bring,” he said.įor years, the brokerage industry has skirted the idea that there was a so-called exodus of advisors leaving the wirehouses to go independent. E*Trade’s CEO Michael Pizzi, however, who will continue to run the E*Trade unit, was optimistic.
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On a conference call with investors Thursday morning, Morgan Stanley CEO James Gorman said that E*Trade’s RIA business was “relatively small and wasn’t an overall driver of the deal” but called the RIA channel “an interesting channel” primarily for referrals. Analysts and industry observers see the deal as a way to move downstream, capturing more of the mass affluent market, but also create an in-house channel for independent advisors through E*Trade’s RIA custody business. Morgan Stanley announced plans Thursday to acquire discount brokerage and custodian E*Trade Financial in a deal expected to close later this year.
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