You can find the original article here money management. Subscribe to our free daily money management newsletters.
Morgan Stanley is looking to bring more customized investment management tools to independent advisors and recently repositioned its services under an initiative called “Integrated Firms for RIAs and Family Offices.” The goal is to unify previously closed business lines in its investment management and institutional equities divisions, and make it easier for RIAs to access them.
According to Morgan Stanley executives, the initiative is paying off. Since launching, the company has raised approximately $1.5 billion from the RIA market across its entire suite of structured products, according to Lou Mandia, head of RIA strategy and distribution for the institutional equities division.
Mandia’s division offers investment strategies for the RIA channel, including options for clients with low-cost, concentrated stock positions who are looking to reduce downside risk and provide liquidity from the portfolio in a tax-efficient manner.
According to officials, the initiative draws on the resources of Morgan Stanley Investment Management, which manages approximately $2 trillion of assets and includes partners such as Parametric and Eaton Vance.
“This allows us to take an already broad, compelling suite of products and make it even more comprehensive and customize the solutions to a higher level for financial advisors and their clients,” said Dave Michaud, co-head of North America intermediary distribution for the Investment Management division.
For example, this might involve combining a variable-prepaid forward contract (essentially a loan against a concentrated stock position) with a tax-efficient long-short SMA strategy.
Mandia said the goal is to serve the RIA market, now a $6.5 trillion space, more holistically.
“Now that we’re having these types of conversations with RIAs, it’s no longer about a specific product,” Mandia said. “We are most interested in serving what I consider the institutional type of RIA and filling that complex problem void in the portfolio or problem point.”
The integration also provides divisions with a clear view of the RIA’s overall portfolio.
“Most of the time when you have this disparate coverage across two divisions, one arm doesn’t know what the other arm is thinking about and implementing for that customer,” Mandia said. “Now we’re going to go and approach that customer from a holistic perspective, from both a portfolio perspective.” The company said this includes better integrating onboarding and reporting processes.
The firm has formed strategic alliances with other wealth management vendors to ease advisors’ access to their strategies, including partnerships with large RIA custodians, Fidelity and Schwab, as well as alternative investment platforms such as CAIS, iCapital and Hello Investing.