Morgan Stanley Buys Barclays Stock Plan Business
Morgan Stanley has purchased Barclays PLC’s stock plan administration business, adding about 40 overseas corporate clients with more than 140,000 stock participants to the rapidly expanding business line, the wirehouse said on Tuesday.
Morgan Stanley two weeks ago closed its $13 billion purchase of E*Trade Financial and said it will buy Eaton Vance for about $7 billion as it expands from servicing wealthy retail customers to a broader spectrum.
It also acquired Solium Capital Inc. and its Shareworks stock plan administration platform in May 2019 to enhance its strategy of balancing volatile trading and investment banking with more consistent revenue sources and to develop wealth management prospects with stock plan participants. E*Trade has a large stock-plan arm in addition to its direct retail brokerage and banking businesses.
The Barclays acquisition is additive rather than transformative. The British bank outsourced its Global Stock and Rewards business to Calgary, Canada-based Solium eight years ago, and its corporate clients who use the Shareworks platform through a white-label arrangement are expected to retain their service and relationship management teams.
Morgan Stanley, which like many large brokerage firms has been retreating from wealth management for overseas clients to avoid legal complications, does not view the Barclays deal as an avenue for building its retail investor base.
“This is a great opportunity to increase the scale of our stock plan business in the UK and underlines our commitment to our global workplace solutions,” Marcos Lopez, co-head of the Morgan Stanley at Work business lines, said in a prepared statement.
Morgan Stanley employs more than 120 people who service about 100 corporate stock plans in the UK, Germany and Spain, the company said. It estimates its European participant base as over 125,000 people holding more than €14 billion (US$16.5 billion) in stock plan assets.
In September, Morgan Stanley said it would begin providing stock plan services to Japanese companies through its strategic alliance with Mitsubishi UFJ Trust and Banking Corp. The Japanese bank owns about 24% of Morgan Stanley.
In May, Morgan Stanley said it will expand wealth management in Canada, using Solium/Shareworks as leverage for building that business.
Morgan Stanley Wealth Management executives restrict prospecting of corporate plan participants to a small group of advisors, who also have been designated to receive referrals from E*Trade of customers seeking full-service advice.