FA Playbook

Morgan Stanley launches new advisory technology platform

Key Points
  • Morgan Stanley has launched a new platform named WealthDesk, which is aimed at serving as one destination for all of their advisors' financial planning, advice and implementation tasks.
  • The firm plans to provide extensive training on the platform in 2019. Within two years, the platform is expected to be completely adopted by its 15,000-plus advisor force.
Adam Jeffery | CNBC

Morgan Stanley is ramping up its fight to distinguish its wealth management business in one key area: technology.

The firm on Monday launched WealthDesk, a new platform for its army of 15,000-plus financial advisors.

The idea of the platform is that it will provide financial advisors with one dashboard where they can go for all of their financial planning, advice and implementation tasks.

The effort is part of a broader technology strategy at the firm. Morgan Stanley has rolled out a tool named Next Best Action, which uses artificial intelligence to help advisors better target their communications to clients. The firm is also teamed up with BlackRock to deliver its risk analytics platform Aladdin to its advisor force.

The new platform will serve as one place where financial advisors can access all of those tools. That means that advisors will no longer have to move in and out of applications.

"We are intentionally spending more money than a lot of other firms have," an executive at the firm said. "We've said from the very beginning we think the future of wealth is a combination of people [and] advisors, paired with the best in class technology."

The platform also lets advisors monitor assets that clients hold elsewhere – such as 401(k) accounts – in order to make more accurate financial plans.

The platform includes four main parts: portfolio advice, which lets advisors construct portfolios and screen investments; portfolio risk, which helps advisors evaluate the risks changes could bring to a portfolio before they make them; relationship fee implementation, which helps come up with a pricing strategy for a client relationship and keep those charges consistent; and "client playback," a tool through which advisors can provide their clients with a summary of their accounts each quarter.

The WealthDesk platform was built in house and piloted with a group of financial advisors. As a result, 10 percent to 15 percent of financial advisors have already adopted the technology.

The rest of the firm's advisor force have the choice to gradually include the new platform in their practices, executives said.

Morgan Stanley will also provide extensive training on the platform in 2019. That includes regional and branch sessions, as well as one-off training sessions.

"Within two years, this will be the preferred way of engaging clients at Morgan Stanley," another executive at the firm said.

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Morgan Stanley is using its technology efforts to differentiate its wealth management business from other major Wall Street firms, which may be more focused on other compensation or margin goals.

"It's a completely different direction," another Morgan Stanley firm executive said. "For Morgan Stanley overall, for use to be successful, the wealth management business has to be an important growing part of our franchise because it's more than 50 percent. At some of the other firms, it's either a much smaller portion or contributes to a different growth aspiration."

Because Morgan Stanley's platform can help advisors better look at what clients are facing and where they need to go, it could be helpful with a regulatory change that could be on the horizon: a fiduciary rule, said Alois Pirker, research director at Aite Group.

A fiduciary standard would require advisors to put clients' best interests first. And while the Department of Labor's efforts on this front have floundered, the Securities and Exchange Commission is working on its own version.

"There will be something that will look like a fiduciary standard that will hit the industry sooner or later," Pirker said. "And you'd better have your tools in place to live up to it in an efficient manner."