Morgan Stanley Overview

Morgan Stanley is one of the leading financial services firms that provides a wide variety of financial services including investing advice, securities trading, wealth management and banking. This review will focus on investment and brokerage services for individuals who may be considering hiring a financial advisor for the first time. When someone says, “I just received a call from my broker about selling a stock” to some it may sound like they live in a fantasy world, thinking only the extremely wealthy have that kind of relationships with their brokers. That is not always the case. Anyone can develop a personal relationship with a financial advisor if they are careful about who they choose to manage their money.

Morgan Stanley Cost

Brokers do charge commissions and fees for their services. It is no different than paying a lawyer, CPA, consultant or architect for the professional services they provide. Each investor must decide if the services provided by a financial advisor are of value to them and if they are willing to transfer responsibility for their money to someone else.

For most individuals, Morgan Stanley has a transaction-based fee structure whereby a commission is charged for each trade – when one buys and when one sells. As seen in the trade settlement statement below $440.31 was charged as commission on a trade of 350 shares with a principal value of $20,997.69. Those who are accustomed to using web-based discount brokerage services may think this highway robbery. But for some investors, the commission covers much more than just the trade. It also covers the cost of personal service for selecting securities to buy or sell and advice on when to make certain trades, to manage money markets, handle tax and estate matters, make required distributions and providing banking services. Sometimes financial advisors, by choice, waive commissions in certain situations or for certain investors.


Morgan Stanley previously had a special pricing plan for more active traders called Choice Select with which commissions were charges on a sliding scale. It implemented Choice Select in an effort to keep investors from going to discount brokers. Instead of a per-transaction commission, rates were based on the number of trades made. The more trades made, the lower the commission rates were. However, the Choice Select plan was discontinued.

Morgan Stanley Fees Other than Commissions

Commissions are not the only fees charged by financial services firms. There are Agent Custody Fees for certain securities such as Honda Motor Company shown in the report below. Each time a dividend is paid an Agent Custody Fee is deducted for Morgan Stanley to hold the stocks. In this case, it is only $1.20 but that is 2% of the dividend paid. When one has many stocks that charge this type of custody fee they can really add up. Morgan Stanley also charges an annual Account Maintenance Fee for each account maintained with it. For 2021 this fee is $100 charged to the cash account in the report below. There is also an annual eDelivery fee of $75 on most accounts to cover the cost of electronic documents since Morgan Stanley no longer handles paper certificates.


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Morgan Stanley Online Services

For individual investors Morgan Stanley has its ClientServ portal which has become increasingly sophisticated over the years. Clients can review their holdings, current and historical performance as well as future projected income. Communications with one’s broker is easy and the portal is very user friendly and easy to navigate. The look and feel of the site is up-to-date and it functions well. The design of the site allows users to view summaries of all accounts or to drill down into the details of transactions.


Morgan Stanley Wealth Management Review

Read Morgan Stanley Wealth Management Review »

Why Hire a Financial Advisor?

Why would anyone be willing to pay the fees charged by financial services firm like Morgan Stanley even when there is a total overall loss of -5.52%? Obviously, many investors believe it is worth it to have someone watching over their portfolios while they are busy with work, family and other life events. People get busy, sometimes too busy to keep an eye on their finances. It is not that they don’t know how or that they are not capable but a choice about how they want to spend their time – living life or constantly watching their portfolios.

Morgan Stanley, like all financial services firms, has as a resource its “corporate memory and experience” that is shared with its financial advisors to use when advising clients. It would be rare for a single individual to have access to such a resource. A brokerage firm has many professionals who are constantly researching the companies and entities offering securities and then sharing that research with its financial advisors. Unless one is willing to invest time in such research, this is one good reason to consider using a financial advisor to help with investments.

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Knowing When to Ask for Help

Studies have shown that people inherently believe they are more capable than they really are in most areas of life. Studying how Wall Street works, watching TV shows on CNBC and doing online research does not always a sophisticated investor make. Even after hefty losses psychological research has shown that many people still won’t admit to themselves that they are not good at making enough wise investment decisions. Sometimes it is better to shift the decision responsibility to someone who does not have unrealistic opinions about how they can beat the market and who can make decisions based on solid research.

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