Morgan Stanley MS 0.13%
bet that a partnership in Silicon Valley will lead to new long-term clients for its wealth management business.
The bank said on Tuesday it had reached a deal with Wilson Sonsini Goodrich & Rosati to take over the action plans the law firm manages for thousands of clients. Terms of the deal were not disclosed. Startups often offer stocks as part of employee compensation. Wilson Sonsini created his own inventory management software decades ago to help clients track the value of their employees’ assets as businesses matured from start-ups and raised outside funds to fund their growth. .
Morgan Stanley embarks on the administration of share plans as an early entry into the financial life of a new generation of clients. Some of those customers, the bank hopes, will turn to it for more lucrative services, such as advice, as their needs become more complex. The digitization of finance has released inexpensive and inexpensive services, such as commission-free transactions and no-fee investment funds, that fund managers are deploying to attract new clients.
The Wilson Sonsini deal aims to give Morgan Stanley a head start in strengthening ties with startups and their employees ahead of a possible public offering. Some will become millionaires overnight; Google Inc., LinkedIn, Twitter Inc.
and Lyft Inc.
are among the companies that the law firm has helped to introduce on the stock market.
Morgan Stanley paid $ 900 million to acquire Solium Capital Inc. in 2019, adding a platform specializing in private companies and last year bought E * Trade Financial Corp., which manages share plans for hundreds of companies, for $ 13 billion.
“This agreement, along with the acquisition of Solium and the business services business of E * Trade, is part of our long-term strategy to be the leading provider of financial solutions to employees in the workplace. Jed Finn, head of corporate and institutional solutions for Morgan Stanley’s wealth management business, said.
Employees of Wilson Sonsini clients will have access to other services, including Morgan Stanley’s financial wellness programs, standalone investment accounts and student loan consolidation plans offered by E * Trade and the advisor network. the financial institutions of the bank.
The partnership can also forge stronger bonds between these clients and other Morgan Stanley businesses, including its investment bank.
Morgan Stanley manages the plans of more than 3,900 companies and their 4.9 million employees, and plans to add several thousand corporate clients through its deal with Wilson Sonsini, people familiar with the deal said.
Morgan Stanley’s wealth management business has $ 4 trillion in client assets.
Wilson Sonsini clients are not required to migrate to the Morgan Stanley platform, and those who move to the bank will not have to pay more than they previously had to keep up with the stock plans, have said people.
Wilson Sonsini plans to phase out its own inventory management software. In recent years, a group of successful and established financial services firms have taken over the employee inventory management business, investing heavily in technology that offers businesses a range of new services.
Carta Inc., a startup supported by Andreessen Horowitz and the Nasdaq Inc. of
Nasdaq Private Market has launched exchanges to help employees and investors of private companies trade their shares.
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