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Morgan Stanley Marries FAs with Algorithms

May 31, 2017

Morgan Stanley plans to help its brokers advise clients better — and sell them more products — by giving them an algorithmic assist, Bloomberg writes.

Starting in July, 500 of the wirehouse’s advisors will pilot what is known internally as “next best action,” a software program that uses machine learning to advise advisors on everything from client birthdays to suitable trades, the news service writes.

The program will spit out recommendations that take into account both the market environment and events in a client’s personal life, such as the death of a parent or deciding on a mortgage, Jeff McMillan, chief analytics and data officer for the bank’s wealth management division, tells Bloomberg.

The program will also collect data from all communications via phone, email and the website and apply machine-learning to make better suggestions for generating more business from the clients, he tells the news service. But McMillan adds, “We’re not trying to sell you, we’re trying to find the things you want and need.”

Morgan Stanley’s goal is to help its advisors engage with clients at relevant times in an environment where hundreds of relationships develop over long stretches of time, Bloomberg writes.

In addition to the machine-learning pilot, which the firm expects to offer to the rest of its advisors by the end of the year, McMillan’s team is building a Siri-like virtual assistant to brokers that will sift through Morgan Stanley’s internal research to answer brokers’ questions, according to the news service. Meanwhile, the brokerage still plans to roll out a robo-advisor this year, Bloomberg writes.


According to McMillan, neither the planned robo nor the machine-learning program are going to put human advisors out of business any time soon, due to the complexity of wealthy clients’ financial planning needs, according to the news service.

But emphasis on technological assistance means the imminent end of large signing bonuses, Kendra Thompson, amanaging director at Accenture, tells Bloomberg.

Working with algorithms, “advisers are going to be part of a value proposition, rather than the service conduit for the industry,” she tells the news service.

Earlier this month, Morgan Stanley already told its brokers that it’s significantly reducing recruitment packages for experienced advisors.

By Alex Padalka
  • To read the Bloomberg article cited in this story, click here.