Morgan Stanley CEO James Gorman says upgrading the digital capabilities of the firm's wealth management unit is a top objective, including efforts to offer clients who want "a full digital relationship."
Gorman detailed the plans to analysts during an earnings call, in which he also touted Morgan Stanley Wealth Management's record quarter. The wirehouse reported on Tuesday that net revenues hit a record $3.99 billion, up 6% from the year-ago period.
The chief executive said there were three aspects to the firm's digital strategy: modernizing FA operations with enhanced digital tools; drive client engagement using predictive analytics and machine learning; and develop an offering for clients who prefer an all digital approach.
Most of the firm's clients are wealthy or ultrawealthy, and there are no plans to target mass affluent clients, Gorman said. But even among the wealthy, the firm has found that a growing number of clients want more digital engagement.
"We don't think in the medium or even long term that it will be a significant part of our business. But I think there's an opportunity to provide clients an opportunity to work with us in multiple channels," he said.
The firm has dramatically increased its digital investments over the past year. Morgan Stanley hired Naureen Hassan, who previously helped develop Charles Schwab's robo advisor, to develop the firm's robo offering and other tools. The wirehouse is also piloting several new tools for advisers to drive client engagement, such as by automatically identifying potential client needs.
Earlier this month, Morgan Stanley also announced a partnership with Silicon Valley-based data aggregator Addepar. The firm's largest private-wealth teams would be using Addepar’s software to manage investments and gather tailored data for their elite clients.
Wirehouses and banks serving ultrawealthy and high-net-worth clients are all increasing their digital wealth management capabilities.
UBS and Wells Fargo are implementing a digital platform developed by Silicon Valley-based startup SigFig. U.S. Bank, BBVA Compass, RBC Wealth Management and LPL have all partnered with BlackRock's FutureAdvisor to develop their own digital wealth management platforms.
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