Morgan Stanley Is Creating the Financial Advisor of the Future


Morgan Stanley automated investment tool

Morgan Stanley, reaping the rewards from cutting costs and staff while boosting revenues, is in the sweet spot of deciding where to best invest its resources for the greatest impact.

The leader in global financial services—offering investment banking, securities, wealth management and investment management services—reported net revenue of $9.7 billion in the first quarter of 2017 and $9.5 billion in the second quarter, and has a surplus of capital to invest in new businesses.

“There is plenty of opportunity for business expansion with the amount of capital we have today,” Morgan Stanley chairman and CEO James Gorman said on the company’s second quarter earnings call with analysts.

One key area in which it’s investing that capital is tech innovation, including AI- and data-driven digital and mobile systems, automated investing and customized multichannel communications, all with the goal of improving the customer and employee experience. Its blend of digital innovation with a commitment to millennial-driven sustainable investing and diversity helps it attract the best and the brightest, as evidenced by its high marks as an employer brand by Fortune magazine and Vault Finance.

“We think the digital strategy is going to be important for both revenue opportunities longer term but also optimization and efficiency around what happens in a branch and how we free up people’s time to spend more time with their clients,” CFO Jonathan Pruzan told analysts on the Q2 call. “It’s a strategy that’s going to be built for the longer term but the thesis of our business is around providing people with personnel advice around their wealth and their planning.”

Bryan VanDyke, Managing Director and Head of Digital, explained in a 2017 report from the CMO Council and RedPoint Global how Morgan Stanley is refining its programs for client engagement, acquisition and retention through the use of digital touch point data:

“We are able to identify customers in real time and deliver distinct experiences to them within both authenticated and unauthenticated environments. As a result, we can then take data about an individual and use it to segment them and deliver content that is unique to that segment. For example, if a Wealth Management client uses our unauthenticated external website, we might deliver a message about our home loan products, which are only available to clients. We also use personalization on a campaign basis on our proprietary sites.”

As part of its investment in innovation and diversity, Morgan Stanley’s new accelerator program for technology and technology-enabled startups, The Multicultural Innovation Lab, targets companies with a multicultural or female founder, co‐founder or CTO. The three‐month program (focused on “capital, connections and content”) began in July and extends to an entrepreneurs’ symposium in November to introduce the startups to potential investors. William Crowder, formerly head of Comcast Ventures, is its Entrepreneur-In-Residence.

Morgan Stanley Wealth Management digital strategy multichannel outreach 2017

Naureen Hassan, Chief Digital Officer for Wealth Management at Morgan Stanley, outlined digital plans in her presentation at the firm’s 2017 U.S. Financials Conference in June. Morgan Stanley’s 16,000 financial advisors are getting a range of tools for multichannel communications with clients, including text (with Twilio), social (with Hearsay), custom email (with Salesforce) and video collaboration.

At top, she also gave a peek at the so-called robo advisor — an artificial intelligence-based automated investments platform rolling out this fall called Morgan Stanley Access Investing — that the wealth management team is rolling out to high net worth clients. As American Banker notes, it’s using AI to help financial advisors, not replace them, and strike a balance between humans and algorithms to better serve customers.

“We’re desperately trying to pattern you and your behavior to delight you with something you may not have even been asking for, but based on what you have been doing, that you might find of value,” Jeff McMillan, chief analytics and data officer for the bank’s wealth management division, told Bloomberg. “We’re not trying to sell you, we’re trying to find the things you want and need.”

A snapshot from its recent Next Generation leadership summit sums up the disruptive trends driving digital change:

As Hassan noted last year when she was hired from Charles Schwab (where she launched its robo advisor), “With $2 trillion in client assets that its world-class advisors have built through a long history serving high net worth families, Morgan Stanley is in a unique position to lead the industry” in digital transformation.

Consider its new online mortgage application tool, announced in June, about which Reuters commented, “It is part of a broad technology investment plan, which also includes the launch of the mobile payments network Zelle and a partnership with Twilio, a communications tool the bank will use to so advisers can securely text clients’ cell phones.”

Morgan Stanley has come a long way since 1935, when it was founded by J.P. Morgan & Co. partners including Henry Sturgis Morgan (a grandson of J.P. Morgan) and Harold Stanley in response to the Glass–Steagall Act requiring a split between commercial and investment banking businesses. With headquarters in New York City, the post-merger company today operates in more than 42 countries and has more than 55,000 employees—and that’s not including the virtual advisors now joining and transforming its ranks.


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