Investment Products and Service Launches

Morgan Stanley Changes Fund Offerings; Wilshire Launches ABR Equity Index; Data Science Partners Develops Downside-Risk Protection Model; and more.

By Javier Simon | May 11, 2017
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Morgan Stanley Changes Fund Offerings

In an internal memo in early April, Morgan Stanley announced changes to its fund offerings.

According to an email the company sent PLANADVISER, it said at the time that it supports the underlying principles of the Department of Labor’s (DOL)’s fiduciary rule and believes that maintaining choice, lowering client costs, offering the highest quality products, and reducing the potential for conflicts of interest across its business are essential to delivering the highest standard of care for retirement and non-retirement clients alike. Morgan Stanley said it would make these changes regardless of whether the rule was implemented or not.

Among the changes going into effect this month, Morningstar is introducing new commission structures for equities/exchange-traded fund (ETFs), annuities and unit investment trusts (UITs) in brokerage accounts that will better align client costs with the value of the service provided. Overall, these changes will lower client costs, in some cases substantially.

The firm is also optimizing its mutual fund platform for both retirement and non-retirement accounts. This includes streamlining the selection of funds available on its platform as well as limiting the potential for conflicts of interest with its asset management partners. “Taking these steps will enable us to broaden our research coverage and enhance our ongoing due diligence on the funds remaining on our platform, helping to further ensure we are providing the highest quality investment options to our clients,” the email says.

Morgan Stanley will be reducing the number of funds on its platform by approximately 25%, eliminating funds that have underperformed, have not attained the scale to be viable on its platform, or, in some limited cases, are not aligned with its levelized fee arrangements. The firm says it will continue to offer clients a diverse array of more than 2,300 funds from the industry’s premier asset managers, enabling its advisers to create portfolios to address the full range of investment objectives. 

In addition, the firm has enhanced some disclosure and suitability standards for certain products and accounts.

NEXT:Wilshire Launches ABR Equity Index