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Morgan Stanley Says New Advisor Platform Gives It a “4-Year Head Start” on Competitors

The investment bank’s wealth management business boasts a native integration with BlackRock’s Aladdin, as well as combined planning and portfolio construction tools.

Morgan Stanley Wealth Management rolled out a new advisor platform: a consolidation of existing dashboards, tools and technologies that executives say has put it “years ahead” of competitors.

The new platform, called WealthDesk, became available to Morgan Stanley’s some 15,600 financial advisors on Monday. 

On the surface, the new platform is simply a consolidation and integration of other dashboards, tools and information that was already available to advisors, but to call it just another advisory platform is a mistake, one executive said during a Wednesday afternoon meeting with reporters to unveil the new workstation.

While virtually all wealth managers are working to deliver goals-based planning alongside investment management, there is often a gap between the creation and execution of an individual client’s plan. With WealthDesk, Morgan Stanley hopes to close it by integrating its Goals Planning System with its investment screening and portfolio construction tools. Information across all of a client’s accounts has been consolidated in advisor and client-facing summaries, helping advisors deliver holistic views advice.

WealthDesk also includes a new fee calculator that advisors can use to develop a strategy for what they charge clients. Using the tool, advisors can compare and contrast what each client pays and weigh the fee against the services they provide. For example, two separate clients might require the same level of planning and advice, but paying different fees for essentially the same service. The tool could be used to support an advisor’s decision to raise fees for the client who is paying less, though executives don’t expect the tool will result in the advisor workforce increasing revenue overall, citing downward pressure on fees in the industry.

The new portfolio risk platform in WealthDesk, in the form of Blackrock’s Aladdin risk analysis tool, is what puts the wealth manager years ahead of competitors, one Morgan Stanley executive said. Blackrock’s risk management software was designed for, and initially used by, institutional investors. In WealthDesk, the new platform will allow advisors to see the likely impact of portfolio changes on a client’s investment outcome before they’re made and integrates held-away accounts into the calculations as well. Risk variances between accounts and an advisor’s entire book of business are also flagged. 

In May 2017, UBS was the first wealth manager to announce a partnership with BlackRock which would make Aladdin available to its advisors. Glenn Regan, the managing director of managed solutions and portfolio guidance at UBS, said at the time the wealth manager had started working with BlackRock on customizing Aladdin software for its own platform more than two years prior to that.

But Morgan Stanley said it’s the first to integrate Aladdin throughout its own advisory platform and executives said it would take three to four years for another firm to accomplish the same feat. 

Executives on Wednesday stressed that the investment Morgan Stanley has made in WealthDesk with other technology has been significant, but declined to share specific figures. 

Despite the costs, Morgan Stanley continued to improve the profitability of its wealth management business in the third quarter. In October, the wealth management unit reported a pre-tax margin of 27.1 percent, up from 26.8 percent in the second quarter and 26.5 percent a year ago. It also recently sweetened the deal it offers to brokers who choose to stay with the firm until their retirement and made improvements to its Financial Wellness Program for plan sponsor employees.

Alois Pirker, the research director at Aite Group, a research and consulting company for financial services firm, said Morgan Stanley was “building the best platform they can possibly build” in response to changes in the industry. Pirker did not consult on the development of WeatlhDesk but is familiar with it. “This is not a cookie-cutter platform,” he said. 

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