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Rating:28 Fund Firms Are Paying Morgan Stanley At Least $1MM Not Rated 3.0 Email Routing List Email & Route  Print Print
Tuesday, August 11, 2015

28 Fund Firms Are Paying Morgan Stanley At Least $1MM

News summary by MFWire's editors

28 mutual fund firms paid Morgan Stanley at least $1 million a year in revenue sharing last year. And that doesn't even count the wirehouse's fee-based accounts.

Morgan Stanley recently released a four-page disclosure detailing its 2014 mutual fund revenue sharing arrangements with a host of different mutual fund families that distribute through its commission-based brokerage accounts. 28 of those families are "Global Partners", who annually shell out $550,000 for training and sales meetings and $200,000 for data analytics. Additionally, all 96 fund families Morgan Stanley offers in the commission-based accounts pay a 16-basis-point "mutual fund support fee", for which the minimum fee is $250,000 annually.

Those 28 Global Partners are (sorted by how much revenue sharing they pay in total, in descending order): Legg Mason [profile], BlackRock [profile], Lord Abbett [profile], OppenheimerFunds [profile], Ivy [profile], First Eagle [profile], J.P. Morgan [profile], Eaton Vance [profile], Pimco [profile], Fidelity Advisors [profile], Putnam [profile], Thornburg [profile], AB [profile], Nuveen [profile], Columbia [profile], Prudential [profile], Virtus [profile], Pioneer [profile], MainStay [profile], Federated [profile], Goldman Sachs [profile], Morgan Stanley [profile], Delaware [profile], John Hancock [profile], Allianz [profile], Guggenheim [profile], First Trust [profile], and Invesco [profile].

Below the Global Partners level, there are 11 "Emerging Partners". They pay $250,000 annually for training and sales meetings and $100,000 for data analytics, plus of course at least $250,000 in revenue sharing. Those Emerging Partners (in descending order by how much revenue sharing they pay) are: Hartford Funds [profile], DWS Scudder (now Deutsche [profile]), Principal [profile], Dreyfus Premier [profile], Henderson Global Investors [profile], Janus [profile], Voya [profile], Neuberger Berman [profile], Touchstone [profile], American Century [profile], and Brandes [profile].

Morgan Stanley also charges fund firms $21 annually per client position or up to 16 bps as an administrative service fee for omnibus trading (both in the commission-based and fee-based accounts). Other funds are traded on a networked basis for up to $11 per year per position.

It's worth noting that only three of Morgan Stanley's top 20 mutual fund family partners (by revenue sharing in the commission-based brokerage accounts, and thus by assets) are not Global or Emerging Partners. They are: Franklin Templeton [profile] (number one), American Funds [profile] (number three), and Wells Fargo [profile] (number 17). 

Edited by: Neil Anderson, Managing Editor

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