Morgan Stanley Culls More Funds from Platform
Morgan Stanley is excising another batch of funds from its wealth management platform, a spokeswoman confirmed.
Continuing what it said is a culling of products that have underperformed for investors or for the firm, the company added to a prominent list that made headlines last May when it removed all Vanguard funds from its menu.
Vanguard, despite have very low-cost funds, is one of the few fund families that refuses to pay brokerage firms for selling its products.
“As we announced in 2017, we will continue on an ongoing basis to rationalize the number of products with the goal of offering the highest quality platform while reducing the number of redundant strategies,” the company said in a prepared statement. “For the best interest of our clients, we are eliminating funds that have underperformed or have been unsuccessful in raising assets on our platform while also expanding the number of strategies that are covered by the Global Investment Manager Analysis team.”
A company spokeswoman did not specify the number of funds being eliminated following the initial 25% cut that left it with about 2,300 funds. “Ignites,” an asset management newsletter, reported that about 600 funds could be cut in the current round following an earlier report on Friday by Citywire that said the number of funds would drop below 2,000.
The remaining mutual fund products are “managed by well-established investment management teams across a wide variety of investment strategies, enabling our advisors to create portfolios to address the full range of investment objectives,” Morgan Stanley said.
Morgan Stanley is not alone in trimming its broad product list, in part to squeeze more fees from fund companies seeking special sales attention and also to sharpen due diligence on the performance of retirement account products to align with the Department of Labor’s new fiduciary rule.
Merrill Lynch, which also purged Vanguard from its fund menu last year, reduced its mutual fund line-up to 2,200 from 3,500 and eliminated mutual funds from its commission-based retirement account platform.