Morgan Stanley Funds and UITS

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Jan 20, 2006 1:44 pm

Can these be ACATed out in kind?  What about the MS managed futures?

Jan 20, 2006 1:57 pm

most likely the UIT's can, and as well the funds.


not so likely for the managed futures.  call your ACAT department and ask...

Jan 20, 2006 2:13 pm
Mike Damone:

Can these be ACATed out in kind?  What about the MS managed futures?


The funds can, but your firm might not be able to hold them. It depends.


There are no MS UITs (VK, however) so if you can hold them, you can ACAT them. The managed futures will not ACAT. Usually you'll have to have the client contact the old broker and sign the form to liquidate them or leave them at MS. If the cleint's owned them two yrs there's no CDSC.

Jan 20, 2006 2:17 pm

Thanks guys.  Have a great weekend.

Jan 20, 2006 2:41 pm

My firm won't hold those funds or UITs.  They said the client will have to call MS and request to cash out.  This is where I get cock blocked.

Jan 20, 2006 4:11 pm

I left MS a couple of years ago. My current firm can do an non automated transfer. Meaning MS will send a cercificate to be held in


the clients account. You dont get a trail but you can get the assets out of MS with no CDSC. Managed futures must be liquidated.


Jan 20, 2006 4:35 pm

Have the client call the 800 number to liq, instead of his broker.

Jan 20, 2006 4:36 pm

Or do a liq & trfr ACAT.

Jan 20, 2006 4:41 pm
exEJIR:

Or do a liq & trfr ACAT.


My back office tells me the client has to call the MS broker to liquidate.  MS will not accept a transfer form with the box marked "liquidate everything."


Jan 20, 2006 5:07 pm

Hopefully the MS (or Van Kampen)funds are not in their "Portfolio Architect" plan, there is no way out of this program other than liquidation.

Jan 20, 2006 5:16 pm
dude:

Hopefully the MS (or Van Kampen)funds are not in their "Portfolio Architect" plan, there is no way out of this program other than liquidation.


Yep, most of the guy's money is in Portfolio Architect.  The other stuff are Van Kampen UITs and some MS / Allstate Variable Annuity with VK and MS subaccounts.


I don't get it.  Morgan Stanely isn't a captive company.  Nor do the brokers get paid extra to sell their own proprietary products.... that being said, why would one recommend this crap?


Jan 20, 2006 5:42 pm

"Yep, most of the guy's money is in Portfolio Architect.  The other stuff are Van Kampen UITs and some MS / Allstate Variable Annuity with VK and MS subaccounts."


Of the last 5-6 clients who have had MS, that is the same exact holdings... I'm assuming Port Arch is the fee based managed account, and they toss in an Allstate VA to get that pop...


Jan 20, 2006 6:32 pm

Yes Blarm, you are correct about the PA.  Although I never sold the Allstate VA.


MikeDamone:


Morgan has 2 fund wrap products, PA and Fund Solution.  I sold PA over fund solution because the PA funds allow access to some of MS's institutional funds w/ minimums of $5mill, which had low expenses (averaged about 1% cheaper than the Fund Solution funds), low turnover and pretty good performance (some were outstanding).  In addtion it made the manager happy; a little brown noseing went a long way at the branch I worked at (although I'm not too proud of it). 

Jan 20, 2006 7:13 pm
dude:

Yes Blarm, you are correct about the PA.  Although I never sold the Allstate VA.


MikeDamone:


Morgan has 2 fund wrap products, PA and Fund Solution.  I sold PA over fund solution because the PA funds allow access to some of MS's institutional funds w/ minimums of $5mill, which had low expenses (averaged about 1% cheaper than the Fund Solution funds), low turnover and pretty good performance (some were outstanding).  In addtion it made the manager happy; a little brown noseing went a long way at the branch I worked at (although I'm not too proud of it). 



Yep I traveled that road at UBS for a while, and hated myself for it.  I'm so glad to be indy and free of all that bs.  It's challenging enough to make money in these markets when you are free to select whatever you want to recommend, much less when your choices are constrained by politics or pressure.

Jan 20, 2006 7:20 pm
exEJIR:

Or do a liq & trfr ACAT.



Make sure if you do a letter or transfer form requesting liquidation that you have the client's signature medallion guaranteed so as to make it harder for the other side to dispute anything.

Jan 20, 2006 7:23 pm

Mike Damone:

I don't get it.  Morgan Stanely isn't a captive company.  Nor do the brokers get paid extra to sell their own proprietary products.... that being said, why would one recommend this crap?


-----------------------------


Answer: To make it harder and more expensive for the client to acat out of MS. For example, if it's going to cost the client 5%-10% of their portfolio to leave, they may have second thoughts.

Jan 20, 2006 8:24 pm
Mike Damone:
dude:

Hopefully the MS (or Van Kampen)funds are not in their "Portfolio Architect" plan, there is no way out of this program other than liquidation.


Yep, most of the guy's money is in Portfolio Architect.  The other stuff are Van Kampen UITs and some MS / Allstate Variable Annuity with VK and MS subaccounts.


I don't get it.  Morgan Stanely isn't a captive company.  Nor do the brokers get paid extra to sell their own proprietary products.... that being said, why would one recommend this crap?




Because it isn't necessarily "crap". I don't do funds, so I don't do Port Arch, but those are pretty cheap to own institutional funds and an overall fairly inexpensive program. Some of the managed futures have been amazingly good, and UITs are a cheap way (if you get breakpoints) to run a portfolio. I haven’t a clue how the guy put the whole thing together, but “crap” isn’t the first thing to come to mind. Aside, perhaps, from the annuity, which is no better or worse than others.

Jan 20, 2006 8:26 pm
SonnyClips:

Always liquidate the Funds anyway.


Not so quick. You could end up sticking the client with cap gains or a CDSC.

Jan 20, 2006 8:28 pm
Mike Damone:

My firm won't hold those funds or UITs.  They said the client will have to call MS and request to cash out.  This is where I get cock blocked.


Your firm can't hold ANY of the funds or the UITs? The UITs aren't even proprietary, they're sold at plenty of firms. You seem to have a really limited b/d.

Jan 20, 2006 8:29 pm
Mike Damone:
exEJIR:

Or do a liq & trfr ACAT.


My back office tells me the client has to call the MS broker to liquidate.  MS will not accept a transfer form with the box marked "liquidate everything."




No one will. Your claint, however, CAN send a "Bob, please liquidate every thing and leave it in cash" letter and then you can ACAT it (all but the managed futures).