Morgan Stanley, the largest U.S. brokerage by salesforce, said on Wednesday it is dropping mutual funds from Vanguard, the largest U.S. mutual fund firm.
Morgan Stanley will not force clients to liquidate any holdings they currently have in Vanguard mutual funds. But starting on Monday, advisers cannot sell any new mutual funds from Vanguard, Morgan Stanley spokeswoman Christy Jockle said in an email.
Jockle said Morgan Stanley's goal was to close out under-performing and less popular funds. The client assets held in Vanguard mutual funds represents a small percentage of all client assets in mutual fund investments, she said.