Morgan Stanley (MS) is getting into the online investing market, aiming to court millennial investors and steal the thunder from rivals Merrill Edge, WellsTrade and Ally Invest. Earlier this week, the Wall Street firm's wealth management unit announced the launch of Morgan Stanley Access Investing, which is a new online investing platform that relies on the company's proprietary goals-based wealth management technology to help investors build, monitor and automatically rebalance their investment portfolios online.
"Morgan Stanley Access Investing leverages the firm's intellectual capital to reach a broader audience of investors who are looking to achieve their financial goals," said Naureen Hassan, chief digital officer at Morgan Stanley Wealth Management, in a press release announcing the new platform. "Morgan Stanley Access Investing is an opportunity for financial advisors to grow their book of business by making connections with prospects earlier and eventually establishing full-service relationships when clients are ready."
Access Investing was built in-house at Morgan Stanley and is aimed at self-directed investors who want a low-cost, easy-to-use platform. The launch pits Morgan Stanley against Merrill Lynch, Wells Fargo & Company (WFC) and Ally Financial Inc. (ALLY) as they all go after younger investors who will become the future millionaires. Access Investing will provide customers with the ability to invest and trade exchange-traded funds, mutual funds and seven thematic portfolios with themes including sustainability, gender diversity, next-wave technology and emerging market trends.
"Our analysis has shown that the next generation of high net worth individuals is looking for more than traditional portfolio allocation. By offering a diverse set of portfolios, we are enabling our clients to invest in what they believe," said Lisa Shalett, head of investment and portfolio solutions at Morgan Stanley Wealth Management, in the same press release. "Morgan Stanley Access Investing portfolios are backed by the same proprietary manager selection analytics used throughout the firm, which we believe may improve the odds of adding performance value for the end investor." Customers must have at least $5,000 to open an account, and advisory fees are set at 0.35% of assets under management.
Morgan Stanley is just the latest traditional financial firm to get into the robo-advising market, which is growing in popularity. As more investors balk at paying hefty fees for hand-holding, they are turning to online investment services and exchange-traded funds to save money. Millennials by nature are more self directed and comfortable with technology, and as a result, they have no problem investing online. They also want help in some instances, which has sparked a race in the financial services industry to marry online investing with real-life advice, all at a cheap cost.
When Wells Fargo announced WellsTrade earlier this year, the firm said that it was going after existing millennial customers who may be looking to open their first investment account. Meanwhile, Merrill Edge and Ally Invest are embracing technology as a way to lure millennial investors their way. Ally Invest thinks it has an edge because it also has a digital bank that is resonating with younger generations. Morgan Stanley, meanwhile, is betting that offering out-of-the-box investment themes could serve as a differentiator.