After selling its 150,000 discount brokerage online accounts today, Morgan Stanley made a bold statement to its 14,000 brokers: you’re important, you’re knowledge is valuable, and we want clients to seek your advice and expertise.
Following the announcement of the $106 million sale to Bank of Montreal, John H. Schaefer, president of Morgan Stanley Individual Investor Group, said in a statement: “Our clients tell us the customized advice and personal service they receive from their financial advisors help them navigate the complexities of the market, and that's where we are focusing our resources."
After the transaction closes in 60 to 90 days, the Canadian bank will merge the Morgan Stanley clients into Harrisdirect. According to a Morgan Stanley broker, the firm will inform clients affected by the sale that they can remain with the Wall Street firm by transferring their account to ClientServ, the firm’s Web service that is accessible to clients when they open an account with a broker. The site provides online account access, real-time account balances and activity, and research. Clients also have access to online trading to buy and sell stocks, bonds, and mutual funds.
“I think there’s a good chance that a lot of those clients will jump over to ClientServ,” says a Morgan Stanley rep. “I mean, why not? Do they really want their account to go to another country? Not that it matters so much when you’re talking about something online. It’s just the principal of the fact that it’s not in the U.S. But I can see a lot of those [do-it-yourselfers] staying and bringing more assets into the house.”
Another Morgan Stanley rep says one of his clients has a family member who has a significant amount of money sitting in one of the accounts that will be transferred to Harrisdirect. “My client doubts that [the family member] will want the account moved out of Morgan Stanley. So he has only one choice: join us.”