Innovations in Wealth Management Technology: Best American private bank for innovation
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Innovations in Wealth Management Technology: Best American private bank for innovation

The bank has the technology to match its vast amount of research to the clients who really need it.

Morgan Stanley

"Morgan Stanley research produces a wealth of investment ideas, but financial advisers are overwhelmed with data,” says Andy Saperstein, head of investment products and services at Morgan Stanley Wealth Management. “We produce 245 research reports a day; it’s impossible for them to know which ones are most relevant.” As part of integrating Smith Barney’s financial advisers into Morgan Stanley, the firm asked them what they needed.

   “In addition to being overwhelmed, they said they were missing the information they did need,” says Jeff McMillan, head of investment platforms at Morgan Stanley WM. “Equity capital markets reports emailed to over 12,000 FAs were, on any given day, relevant to only a small set of them. That kind of untailored information just causes people to switch off and often miss the content they really need.”

Morgan Stanley’s answer was 3D Insights Engine, which it introduced at the beginning of this year. Its technology analyses the research, information and products and matches them specifically to client portfolios and financial advisers that are relevant. That feeds into the advisers desktops so they can see overall what would be of interest to their clients, and then feeds into the FA’s view of individual client accounts.

“It’s a little like [TV on-demand service] Netflix, in that we are taking the advisers’ interests – what do their clients’ own and need, our view of where markets are going – and then overlaying that on what the advisers receive from us, or view on their screens,” says McMillan. “It’s exactly the opposite of a top-down product push.”

Financial advisers can rate the ideas, the software analyses what is being ignored, and so the model gets smarter at understanding the choices being made. “It helps to know what is being ignored so we can ask the adviser: ‘Is that because you don’t like that product? Or is it because you need more information on it?’ It becomes a virtuous feedback loop as to what our advisers want,” says McMillan.

Morgan Stanley is also investing in client performance reporting. It recently redesigned that capability so that advisers can put together reports at the touch of a button rather than having to sort data manually, and clients can easily see their performance whenever they choose.

“Financial advisers spend vast amounts of time constructing different performance reports for clients when they could be out building relationships and understanding the client better,” says Jon Stinson, executive director of platform strategy. Over the last two years the bank has been working on how to condense some 6 million scenarios into digestible and useful reports. The end-user design is similar to Apple’s iOS interface so that the FAs will feel familiar with the software. In addition Morgan Stanley looked at reducing or eliminating the lengthy disclosure agreements it has and to introduce e-signing.


Says McMillan: “In the end, it is ideas that will win. The best intellectual capital will win clients. What drives those ideas and the analysis of the performance of those ideas will be algorithms. In five to seven years, how we compete [here] will be very much supported by algorithms. We didn’t have the technology for that four or five years ago, not at an affordable price point, but now we do.”