Ally Invest’s wealth management business was acquired by Morgan Stanley in 2020. This acquisition is an important step for Morgan Stanley to transform its business towards light asset management. By integrating Ally Invest’s capabilities in retail business and digital services, Morgan Stanley aims to further enhance its wealth management business. With the acquisition, Morgan Stanley Wealth Management is expected to achieve new growth momentum, with annual growth of about 4%.
Morgan Stanley acquires Ally Invest to obtain retail business capabilities
Morgan Stanley has been transforming its business towards light asset management under the leadership of James Gorman. In 2013, it completed the acquisition of Citibank’s shares in Morgan Stanley Smith Barney joint venture and rebranded it as Morgan Stanley Wealth Management. Since then, the wealth management business has been growing at about 4% annually. The acquisition of E*Trade brings new growth momentum. Facing increasing competition and lower acquisition barriers, Morgan Stanley’s CEO James Gorman described this acquisition as a “quantum leap” for the company’s wealth management strategy.
Common challenges for Morgan Stanley in building and acquiring businesses
In 2018, Morgan Stanley launched the WealthDesk platform to help its over 15,000 wealth advisors serve clients better. However, from WealthDesk, Next Best Action, to the subsequent acquisitions of Solium, E*Trade and Eaton Vance, it is clear that good ideas and companies emerge constantly in the industry. The most difficult challenge is not the tools, technologies or business models themselves, but how to optimize, upgrade, integrate multiple services, achieve technical integration, and enable efficient internal operations.
Morgan Stanley aims to absorb Ally Invest’s retail and digital capabilities
The key reason Morgan Stanley acquires Ally Invest is to absorb its capabilities in retail business and digital services to further enhance Morgan Stanley’s own wealth management offerings. By leveraging Ally Invest’s strengths, Morgan Stanley can provide more customized and efficient services to retail investors through digital channels, thus attracting more clients and growing its business.
The acquisition of Ally Invest wealth management business is an important move for Morgan Stanley to keep transforming towards light asset management and strengthen its wealth management unit. By integrating Ally Invest’s retail and digital capabilities, Morgan Stanley aims to provide better wealth management solutions to more investors.