Morgan Stanley Wealth Management Australia secures the coveted 2020 IMAP Award for Licensee Managed Account category

By Jayson Forrest - Managing Editor  - IMAP Perspectives

Nathan Lim Morgan Stanley Head of Wealth Management Research Australia
Nathan Lim Morgan Stanley Head of Wealth Management Research Australia

Global goes local at Morgan Stanley - Providing an investment solution that is fit-for-purpose for its clients has landed Morgan Stanley Wealth Management Australia the coveted 2020 IMAP Award of Licensee Managed Account.

With business hubs spanning the five mainland capital cities, a national team that includes 99 financial advisers, and A$30 billion in funds under management, Morgan Stanley Wealth Management Australia - the local arm of global behemoth, Morgan Stanley - is quickly making a name for itself in the managed accounts space.

Not only was it named a finalist in the Innovation and Multi Asset categories of this year’s IMAP Awards, the wealth management business also took out the coveted gong of Licensee Managed Account.

But Morgan Stanley is a relative newcomer to managed accounts, with the Australian business first dipping its toe into this investment solution back in November 2015, through its proprietary platform - Private Wealth Manager (PWM).

However, as the PWM platform was primarily reserved for Morgan Stanley’s ultra-high network of sophisticated clients wanting to access the business’ global capabilities, it wasn’t until July 2018 that Morgan Stanley finally launched its SMAs for domestically focused clients on the Praemium platform.

Why did we do it,” asks Morgan Stanley Head of Wealth Management Research Australia, Nathan Lim.Well, there was clearly a growing demand amongst our clients who liked the flexibility and transparency that SMAs provided.”

Two years on, including notching up the IMAP Licensee Managed Account award, and Nathan knows it was the right decision for the business to make.

IMAP Awards 2020 Licensee category winner Morgan Stanley Wealth Management Australia
Morgan Stanley Wealth Management Australia

At Morgan Stanley, we are very much driven by research. We are led by deep reflection and analysis on the circumstances at hand and where they suggest we are going. The fact is, things change and they can change quickly. And once change happens, you have to make adjustments.

Nathan Lim

Harnessing a global capability

With impressive global resources at hand, including an institutional research capability that comprises over 630 analysts, strategists and economists operating out of 21 countries, Morgan Stanley is able to provide extensive macroeconomic and geopolitical insights to the Australian business.

“In Australia , we draw on these resources and intellectual property from our parent company in the U.S., localise it and make it fit-for-purpose for our Australian clients. And that’s where our local portfolio implementation committee gets involved,” Nathan says.

“And complementing this institutional capability, we also draw from our own U.S. wealth management research, which includes an additional 150 analysts and strategists. This team specifically writes research that is targeted at wealth management clients, which enables us to leverage best practices in terms of how to construct portfolios and service the needs of clients.”

Morgan Stanley Wealth Management Australia’s investment committee comprises of two portfolio managers - Nathan and Alexandre Ventelon, who is the asset allocation strategist for Australia -  and three analysts: Wayne Chatterjee, Sharmeel Suka and Sophie Egan. Their job is to pull together all of Morgan Stanley’s considerable resources and intellectual property for the Australian market. It’s an undertaking not for the faint-hearted! 

It’s this approach to investing, by leveraging our considerable global capability and investment expertise, that provides our clients with the peace of mind that their portfolios are being managed in the best way possible

Nathan Lim

Flexibility is key

When it comes to its SMA offering at Morgan Stanley Wealth Management Australia, Nathan believes it’s crucial for a manager to be flexible and willing to change its mind if the facts behind an investment decision changes.

“At Morgan Stanley, we are very much driven by research. We are led by deep reflection and analysis on the circumstances at hand and where they suggest we are going,” Nathan says. “The fact is, things change and they can change quickly. And once change happens, you have to make adjustments.

“So, we firmly believe that Strategic Asset Allocation (SAA) is the biggest driver of client returns. SAA sets the boundaries, enabling you to then manage within that with Tactical Asset Allocation (TAA), which provides the ability to then take advantage of short-term opportunities through that research process.

“We blend that research-based approach with actual implementation for the client, which is how we bring the two together.”

Our SMA offering provides clients with exactly what they want; the ability to fully leverage Morgan Stanley’s deep intellectual capability

Nathan Lim

Client value proposition

 The typical client using Morgan Stanley’s SMA offering tends to be older and financially independent, who want a transparent and flexible investment solution. These clients also see value in managed accounts in the way their investments are managed, which forms a key part of Morgan Stanley’s overall client value proposition.

Firstly, Nathan says the SMA structure is particularly good for those clients who want a core satellite approach to investing. He explains: “These clients will have a core that they will put into our multi asset model portfolio solution, but at the same time, they want to leave an allocation or a sleeve for opportunities that might crop up.

“For example, clients might want to take advantage of a global IPO or they might want to take a look at a structured note. These clients want to have the ability to tap into broader product offerings. So, having that core satellite approach enables them to not worry about the bulk of their day-to-day wealth, but have the flexibility to examine opportunities as they arise.”

And importantly, Nathan believes Morgan Stanley’s SMA offering provides clients with exactly what they want; the ability to fully leverage the business’ deep intellectual capability by allowing it full discretion over their portfolio.

“It’s this approach to investing, by leveraging our considerable global capability and investment expertise, that provides our clients with the peace of mind that their portfolios are being managed in the best way possible,” Nathan says.

For example when the research department says it’s time to start selling down international exposure, we release that information simultaneously to everybody across the business.

Nathan Lim

Fairness in distributing content

This year’s awards judges were also impressed with the systems in place at Morgan Stanley to communicate portfolio changes to both advisers and clients. At the heart of its approach to stakeholder communication is Morgan Stanley’s democratisation of information, where information is evenly distributed across the business.

“Whether you’re an internal or an external client, all clients get access to the same information at the same time. There is no uneven distribution of information concerning changes to investment portfolios,” Nathan says.

“There are ‘Chinese walls’ between our research and product departments. So, when the research department says it’s time to start selling down some of its international exposure, when that decision is made, we release that information simultaneously to everybody across the business.

“That means whether you’re part of an internal team on the product side implementing client portfolios or you’re an external client, everybody gets that same feed of information at the same time. There is fairness in the way we distribute our content.”

The key is ensuring that whatever solution the business comes up with, is fit-for-purpose for its Australian clients

Nathan Lim

A fit-for-purpose solution

Winning the prized award of Licensee Managed Account, Nathan says it is validation of the hard work the local team has put into building a process that leverages the enormous global resources and capability of Morgan Stanley, while at the same time, ensuring that whatever solution the business comes up with, is fit-for-purpose for its Australian clients.

“This award recognises that the value proposition we create for our clients is amongst the best in the country.

And that’s really satisfying for all of us in the Morgan Stanley Wealth Management Australia team, because it supports that what we aim to achieve for our clients, which is to provide them with the best possible outcome, is what we’re actually delivering,” Nathan says.

IMAP congratulates all the finalists in the Licensees category.

  • Atticus Wealth Management
  • Crystal Wealth Partners
  • GPS Wealth
  • Infinity Asset Management
  • Morgan Stanley Wealth Management
  • Royston Capital

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