In December 2017, amid the rise of robo-advisors, Morgan Stanley launched a robo-advisor of its own: Morgan Stanley Access Investing. The service is aimed at younger investors who will someday likely want a full-service advisor. It requires a minimum investment of $5,000 and an annual fee of 0.35% of your assets under management.
The service has the obvious perk of name recognition, and investment professionals at Morgan Stanley manage all investments made through its robo-advisory service.
Portfolios feature a mix of investments, and investors can choose from a variety of strategies, which include both passive and active investments. Uniquely, you can devote a portion of your portfolio to a theme that focuses on a particular market trend or an investment idea, like sustainability or gender diversity. The service provides ongoing portfolio monitoring, automatic rebalancing and tax-loss harvesting.
Investors who want a hands-off approach; people who are interested in socially responsible or values-oriented investing
Fees don't account for operating expenses of some mutual funds, so returns may be lower; Morgan Stanley advisors cannot offer advice on Access Investing accounts
Pricing: How Much Does Morgan Stanley Access Investing Cost?
|Option Name||Management Fee||Minimum Balance||Features|
|Morgan Stanley Access Investing||0.35% annual fee||$5,000||Comes with ongoing portfolio monitoring, automatic rebalancing and tax-loss harvesting, and offers a range of portfolios, including active and passive investments and thematic strategies|
Morgan Stanley Access Investing
Morgan Stanley Access Investing requires a minimum balance of $5,000. The service charges an annual fee of 0.35% of assets under management. That fee is charged quarterly, and it's based on your current account balance, so the amount that you pay could change if the value of your assets increases or decreases.
You will not pay any account service, transaction or termination fees. However, you will separately pay fees related to owning shares of a fund for all of your investments in mutual funds and exchange-traded funds. While you will pay for operating expenses, you will not be charged load or short-term redemption fees when mutual funds are bought or sold.
To close your account, all you will have to do is call Morgan Stanley. If you decide to close your account, there won't be any fees involved. If you are closing out a retirement account, Morgan Stanley will waive the IRA termination fee. Or, if you are transferring assets out of Morgan Stanley using an automated customer account transfer (ACAT) service, the firm will waive the ACAT fee.
Morgan Stanley Access Investing: Investing Strategy
Morgan Stanley Access Investing recommends a broad, diversified portfolio that blends active and passive investment strategies. The firm's model portfolios use mutual funds and/or ETFs, which are selected by Morgan Stanley's investing team with your objectives, time horizon and risk tolerance in mind.
Investors can choose from three portfolio strategies:
- Uses ETFs and mutual funds
- Aims to optimize returns, based on risk levels
- Invests in companies that integrate environmental, social and governance (ESG) factors
- Aims to avoid risk and create long-term value
- Invests only in ETFs, which are diversified across asset classes and global markets
- Created to track a blended market index
Beyond that, investors can opt to dedicate a portion of their portfolio to a theme, which focuses on a market trend or an investment idea. There are seven themes to choose from:
- Genomics and bio-medicine
- Climate actions
- Robotics and data and AI
- Defense and cybersecurity
- Global frontier
- Emerging consumer
- Gender diversity
- Inflation conscious
Access Investing offers three types of accounts: personal accounts, traditional IRA accounts and Roth IRA accounts.
- Personal accounts
- Traditional IRA
- Roth IRA
- 401(k) rollover
- 529 college savings
Morgan Stanley Access Investing espouses what it describes as a "smart mix" of investments. Clients can choose from a three investing strategies, ranging from passive-active to fully passive, and can further customize their portfolios by selecting a theme in which to invest. All investments are managed by investment professionals at Morgan Stanley.
Investors have can continually monitor their investments online. You can see your portfolio's progress compared to its hypothetical projected performance and progress, use Morgan Stanley's Global Investment Committee's market assumptions to see how your portfolio may grow over time, and view outcomes for varying market conditions. You can make changes to your account at any time, including to how much you want to contribute, and Morgan Stanley will then adjust your investing plan.
On a daily basis, Morgan Stanley Access Investing will analyze your portfolio to ensure it's staying in range of its target asset allocation. If your portfolio has drifted, Morgan Stanley will buy or sell accordingly to bring your portfolio back to its targeted asset allocation.
Investors can also opt for automatic tax-loss harvesting, which is a portfolio management practice that seeks to minimize taxes. If you choose to use this service, any investment that has a loss will be sold to offset the taxes you'll have to pay on your investment income. The sold investment will then be replaced with a comparable investment, which ensures your asset allocation is maintained and your tax bill is minimized. Morgan Stanley does not charge trading costs for this service.
Who Morgan Stanley Access Investing Is For
Morgan Stanley views its robo-advisor service as an opportunity to attract younger investors, sometimes the children of existing investors, who will later need its full-service investment services. The firm included socially responsible and values-oriented investing options in the hopes of attracting a millennial audience.
That being said, Morgan Stanley Access Investing is an option for investors of any age who don’t have a particularly complicated financial situation and who are comfortable conducting their investment business entirely online and through electronic communications. Access Investing clients do not have access to Morgan Stanley advisors, nor do they have a dedicated financial advisor or financial advisor team to help them. If you're looking for a traditional financial advisor, SmartAsset's financial advisor matching tool is a good place to start.
Morgan Stanley Access Investing allows for a decent amount of customization, from its range of portfolio strategies to its selection of themes. Its $5,000 account minimum means that you have to have at least some money set aside to invest. Its fees aren’t notably higher or lower than those of its competitors, including Ally Invest and Fidelity Go.
- Tax-loss harvesting
- Automatic rebalancing
- Automated portfolio planning
- Human advisors
- Direct indexing
- Fractional Shares
How Morgan Stanley Access Investing Works
To open a Morgan Stanley Access Investing portfolio, you'll be asked to answer a series of questions about your financial goals and situation. The first step is to choose one of eight goals: retirement, build wealth, buy a car, buy a house, saving for a wedding, start a business, education or a custom purchase. After that, you'll be asked for your date of birth, annual income, the amount you'd like to save and the timeframe within which you'd like to hit your goal. You can choose from a three-year timeframe up to a 20-year timeframe.
Once you've filled in that information, Morgan Stanley will recommend one of its three portfolio strategies. At this point, you can opt to select one of the seven themes to add to your portfolio.
Once your goals are set and your investing style chosen, you will fund your account with an initial deposit and enter how much you plan to contribute each month. With this information, Morgan Stanley will project your progress toward your goal over time and give you the option to adjust the amount of your initial deposit and/or monthly deposits. You can fund your account through electronic transfer, mobile check deposit, wire transfer, rollover from a qualified plan or a cash transfer from another Morgan Stanley account.
What’s the Catch?
Some robo-advisors provide at least some element of communication with its human advisors; Morgan Stanley is not one of them. Morgan Stanley advisors cannot offer advice on Access Investing accounts. All interactions are restricted to online and electronic communications. While Morgan Stanley's investment professionals will manage all Access Investing investments, you will not be assigned an individual financial advisor or financial advisor team.
While there are multiple customization options including portfolio strategies and themes, the investing process is hands off. You can monitor your portfolio online and make changes to your contribution amount, Access Investing is a discretionary investment advisory account, which means Morgan Stanley makes your investing decisions for you.
As for fees, Morgan Stanley excludes mutual fund operating expenses from its fees, so returns may be lower once you pay the fees related to owning shares of a fund.
Competition: How Morgan Stanley Access Investing Stacks Up
Morgan Stanley Access Investing's fees are about in line with those of two of its main competitors, Ally Invest and Fidelity Go. Ally Invest's fees are slightly lower, with an annual fee 0.30% of assets under management, and it also has a lower minimum balance, at $100. Fidelity Go has the same fee rate and minimum balance as Morgan Stanley Access Investing.
While Morgan Stanley Access Investing and Fidelity Go are strictly hands-off, Ally Invest provides options for both hands-on and passive investors. Like Access Investing, Fidelity Go and Ally Invest offer automatic rebalancing, but neither offers the tax-loss harvesting feature that Access Investing does. None of the three robo-advisors offer access to human advisors.
Ally Invest supports by far the most accounts. In addition to the individual, IRA and Roth IRA accounts offered by Morgan Stanley Access Investing, it offers SIMPLE IRA, rollover IRA, trusts and business accounts. Fidelity Go offers slightly more account options than Access Investing, with the added option of joint accounts and rollover IRA accounts.
Bottom Line: Should You Use Morgan Stanley Access Investing?
There are pros and cons to every robo-advisor, including Morgan Stanley Access Investing. If you’re a young investor or don’t have a particularly complicated or involved financial situation, Morgan Stanley Access Investing is a solid option. The robo-advisor service offers a unique level of customization with its three portfolio strategies that include both active and passive investments and its seven themes. While you’ll have the experienced investment professionals at Morgan Stanley making your investment decisions, you will not have access to Morgan Stanley’s financial advisors. This robo-advisor is best for people who are comfortable working entirely digitally, as all Access Investing communications are online or electronic.
Tips for Finding an Advisor
- Sometimes, a robo-advisor with occasional human guidance doesn’t quite make the cut. If that’s the case for you, let us help you find a traditional financial advisor. With SmartAdvisor, you’ll take a short quiz and we’ll do the rest. We’ll pair you with three advisors in your area who fit your preferences and financial needs. Then we’ll put you in touch with these advisors to help you find the right one.
- When choosing a financial advisor, keep your goals and needs in mind. Are you putting a child through college while also saving for a new home? Find an advisor who can help you with that. It helps to ask advisors questions about their credentials and experience to better determine whether they’re right for you.