Morgan Stanley puts new twist on its recruiting efforts
Digital investments are getting the spotlight treatment at Morgan Stanley, even in the firm's recruiting strategy.
At a meeting last week in Manhattan with industry headhunters, Morgan Stanley executives showcased how its substantial technology investments benefit advisors working at the firm and their clients, according to four people with knowledge of the matter. Afterwards, they had dinner at Del Frisco’s Double Eagle Steakhouse in midtown.
"They're feeling like they've got the best growth offering and they want to get that message out," a recruiter who attended the meeting says, adding that the wirehouse is placing greater importance on the story it tells potential recruits.
This new digital emphasis comes about 10 months after Morgan Stanley left the Broker Protocol, an industrywide accord that permits advisors who switch firms to take basic client contact information with them. Morgan Stanley had previously reduced its recruiting push and does not intend to re-accelerate those efforts soon.
A spokesman, who confirmed the meeting with external recruiters, said the company's hiring strategy with regard to experienced advisors has not changed; the firm remains committed to selective recruiting.
"Over the past few months we've taken investors, analysts and the media through our digital enhancements. We did the same for our recruiting partners. As we always do, we try to be sure that when they are representing us to potential candidates that they are doing so with firsthand knowledge of our strategy," the spokesman said in a statement.
Morgan Stanley has been introducing new digital tools and apps over the last two years in a bid to improve advisor productivity and client experiences. These investments have included a new robo advisor and a predictive algorithm that identifies opportunities for advisors to reach out to clients regarding their portfolios and goals. In its training program for new advisors, Morgan Stanley is placing a greater emphasis on its digital suite.
The firm achieved a record 7,719 independent and employee advisors in the second quarter.July 26
Total broker head count dropped by 173 from the prior quarter, according to the wirehouse.July 13
Recently, the company also made tweaks to next year's compensation plan to incentivize its more than 15,000 brokers to make use of these new tools.
But whether state-of-the-art technology is enough to attract top talent from competitors still in the protocol is an open question. Being a nonmember firm may pose challenges as advisors at protocol firms may be hesitant about moving their books to Morgan Stanley, according to a recruiter who was not present for the meeting and who asked not to be named.
Earlier this year, Morgan Stanley filed several lawsuits seeking to block advisors who left for rival brokerages from contacting their clients.
Although a slew of brokers bolted for the exits in the immediate aftermath of Morgan Stanley's protocol exit, advisor retention has improved in recent months. Head count declined by 50 advisors to reach 15,632 as of June 30, according to the company.
UBS — which also left the Broker Protocol — and Merrill Lynch have also improved retention. At the same time though, both firms have also cut back on recruiting efforts, citing high costs and an intent to shift resources away from hiring new brokers to those currently on the company payroll.