The Morgan Stanley acquisition of E*TRADE in 2020 was one of the biggest shake-ups in the brokerage industry in recent years. But it wasn't exactly a surprise. Mergers and acquisitions are one of the 澳洲幸运5官方开奖结果体彩网:key trends shaping the industry, and they’re likely to continue🍃 for the foreseeable fut𒈔ure. 

Yet a merger of this size can have a significant impact on the industry, and it can affect both clients a💯nd advisors.

The Changing Financial Landscape

“Morgan Stanley’s acquisition of E*TRADE reflects🐼 the broader trend toward industry consolidation and the attempts we see across many financial institutions to serve the full range of customer segments,” says , former director of asset management and brokerage research at Corporate Insight.

As part of that trend, companies are looking for ways to increase their range of services while reaching a wider demographic of clients. “The aim here is to provide holistic financial management that gives the organization a full view into🎶 clients assets and ensures that money stays within the firm’s ecosystem,” says Butler, noting that 61% of investors surveyed agree that they would like to have all (or nearly all) of their financial🗹 accounts with their principal brokerage firm.

What the Merger Means for Advisors

While consolidation may offer more all-inclusive solutions for clients, XY Planning founder 澳洲幸运5官方开奖结果体彩网:Michael Kitces believes the merger is likely to have significant implications for RIA custodial platforms and could lead to the dissolution of E*TRADE’s RIA platform for s🎉mall firms. 

“[The] Morgan Stanley acquisition of E*TRADE and potential loss of E*TRADE Advisor Services as a viable RIA custody competitor puts even MORE pressure on the #Schwabitrade deal,” Kitces said in a series of tweets after the announcement. He also emphasized that there are “only a coterie of small-RIA custody options left, and even fewer competitive choices for large RIAs."

This is especially significant since the bulk of the custodial market is made up of only a handful of key players and additional consolidation could lead to fewer choices for RIAs in the future. While Fidelity, Pershing, Charles Schwab, and Ameritrade hold 80% of RIA firm assets, E*TRADE has made a name for itself in the custodial space, largely due to its acquisition of Trust Company of America in 2017. The merger with Morgan Stanley could 🌟change that, narrowing the field ﷽of custodians even further. 

While the true impact remains to be seen, Kitces believes the merger is the result of the continued effect of last year’s race to zero commissions. As s🌸u🃏ch, it may be just one of a series of continued changes throughout the industry.

The Bottom Line

The past few months have seen a 澳洲幸运5官方开奖结果体彩网:flurry of mergers and acquisitions for both large firms and small ones. And if these consolidations have taught us anything, it’s that the adviܫsory landscape is undergoing a significant shift. While the Morgan Stanley, E*TRADE merger may have been the biggest in recent months, it’s likely not the l🥂ast.