Morgan Stanley vs. Merrill Lynch: Who’s on Top?
WealthManagement.com opines that Morgan Stanley has pulled ahead of Merrill Lynch in the financial-advice industry in the years since the financial crisis of 2008-09. But the website’s criteria for championship appear slightly random.
For one thing, the column fails to mention that both Merrill Lynch and Morgan Stanley reported advisory assets of $1.9 trillion in 2013, with Merrill posting slightly higher annual revenue for the year than its competitor. For another, in the recently published FT 400 ranking of top financial advisors nationwide, Merrill has 119 advisors on the list, just elbowing past Morgan Stanley’s 116. The Financial Times’s criteria include assets under management, AUM growth, years of experience, number of highly regarded industry certifications and regulatory records. By contrast, WealthManagement.com compares the two firms’ global reach, internal culture, crisis management and tech platforms.
The website explains that both wirehouses’ global investment-banking activities have shrunk considerably since the early 2000s. But whereas Merrill “sold off nearly all of its existing wealth management offices outside of the U.S.,” Morgan Stanley executives “braved the storm” and “remain serious investment banking players globally.” WealthManagement.com says it’s “common knowledge” that this feeds the firm’s advice business. But it doesn’t say how much. Furthermore, Thomson Reuters actually ranks Bank of America Merrill Lynch considerably ahead of Morgan Stanley in
investment-banking fees collected globally in 2013. Nonetheless, the latter wins WealthManagement.com’s “global reach” race.
Culturally, WealthManagement.com argues that the Merrill brand has remained consistent after Bank of America bought it, whereas longtime Morgan Stanley FAs — enduring acquisitions by Smith Barney, Citigroup and even Mitsubishi over the years — have had to change stripes too many times. So the website gives Merrill the advantage with respect to culture. Not so for crisis management. Here, Morgan Stanley wins because the columnist can name CEO James Gorman but not his counterpart at Merrill. (The investment-banking stuff comes up again here, bafflingly.)
Finally, on tech, WealthManagement.com doesn’t pick a champion. But it says Morgan Stanley’s disastrous 3D system rollout is way back in the rearview mirror, whereas the “jury is still out on the Merrill One platform.” The website mentions “rumored” higher fees on Merrill One. It doesn’t mention that the platform won a tech industry award for its effective integration last year.
In any case, none of these discussions addresses the questions at the heart of the business: Which firm’s clients are more satisfied with their advisors, or which firm makes it easier for advisors to do their job. No surprise, then, that the website’s anointment of Morgan Stanley reads a bit like a foregone conclusion.