Morgan Stanley has poached a Charles Schwab executive who led the company’s robo advisor team.
Naureen Hassan, the former executive vice president of investor services segments and platforms at Schwab, will now fill the newly created role of chief digital officer for wealth management at Morgan Stanley.
Neesha Hathi, head of technology for Schwab Advisor Services, will take over Hassan’s role in investor services, while Tobin McDaniel, president of Schwab Wealth Investment Advisory, will continue to lead the day-to-day operations of the robo, a role he’s had since launching the service.
In a statement released Wednesday, Morgan Stanley said Hassan will lead the strategy and marketing of digital tools and platforms for the firm’s advisors to improve their “ability to compete for today’s high new worth individuals as well as those emerging in the next generation.” According to Bloomberg, Hassan will be based in San Francisco and report to Jim Rosenthal, Morgan Stanley’s chief operating officer, and the co-heads of the wealth management division, Shelley O’Connor and Andy Saperstein.
“I believe the winning approach will combine the wisdom and insight of a human financial advisor with sophisticated digital technology that can help drive performance and enable clients to access services when and how they want,” Hassan said, adding that Morgan Stanley is in a unique position to the lead the industry on this.
In her role at Schwab, she had helped the brokerage become one of the leaders in the digital advice space by overseeing the development and launch of Schwab Intelligent Portfolios, a direct-to-consumer automated investment service that accumulated $5.3 billion in assets in its first year. Hassan also oversaw Institutional Intelligent Portfolios, a white label version of software built for Schwab advisors.
Jasen Yang, the CEO of Polly Portfolio, a robo advisor startup, said the hiring by Morgan Stanley indicates that large financial institutions are trying to quickly move into the automated advice space to compete with smaller firms. Yang noted that JP Morgan private bank recently hired another Schwab executive, Kelli Keough, to be their head of digital, and suggested that regulatory pressure like the proposed DOL rules could be contributing to the shifting mindset.
“The big question in my mind is whether the large FIs are going to be willing to move beyond rolling out robo 1.0 knockoffs for their smaller balance customers,” Yang said. “I think there’s also an opportunity for them to transform and streamline their core private wealth businesses as well, but it’s going to require more advanced and flexible technology than what the first-generation robos have demonstrated and a willingness by their advisors to embrace some changes to their daily workflows.”