Morgan Stanley Offers Wealth Management Services to Founders and Employees of near-IPO Startups

This strategy will help Morgan Stanley to be viewed as a trusted ally at an important financial moment in the lives of newly-IPO companies' employees.

By Thea Felicity

Nov 19 2024, 11:02 AM EST

Morgan Stanley Reports 40 Percent Drop In Quarterly Profit — NEW YORK, NEW YORK - JANUARY 17: The Morgan Stanley headquarters building is seen on January 17, 2023 in New York City. Morgan Stanley reported a more than $2 billion in profit for the fourth quarter, giving the company a 40 percent decline from the previous year. Michael M. Santiago/Getty Images

With the US investment banking sector expecting a boom in Initial Public Offerings, Morgan Stanley is getting ready to offer its wealth management services.

Reports state that the company is preparing to court founders and employees of near-IPO companies with a partnership with Carta, a firm managing shareholder ownership in start-ups that have been backed by venture capital and private equity.

Morgan Stanley Seeks Clients from Near IPO Start-ups

Reuters reported that Carta is already estimating that about 2,000 of its 40,000 clients are on their way to an IPO, presenting Morgan Stanley with a growing market to leverage from.

According to Jed Finn, the head of Morgan Stanley Wealth Management, employees engaged with such firms would require more than just equity management. They will need a holistic financial counseling service, with retirement savings and investment advice, especially in such significant points of liquidity when their company goes public.

The strategy is to place Morgan Stanley as a trusted ally at a pivotal financial moment in the lives of many of its employees.

With the recent political changes that signal a revival in IPOs, more activity is expected in capital markets. Analysts think that the Trump administration may relax the rules, and thus most likely, there will be more IPOs in the near term.

Wealth clients from workplace relations and other events, such as IPOs, tend to be younger and keep more of their wealth in a company's stock. Morgan Stanley views these people as an ideal target group for the wealth management service.

The firm has been highly successful in adding clients, with about 19 million wealth clients, and 1.3 million new clients in the last year, per US News. Much of this growth was achieved through workplace relationships, which is seen as a rapidly growing channel for wealth management services.

Although the IPO market has been bogged down over the past years, Morgan Stanley is upbeat. In fact, the bank expects upcoming IPOs will be bigger companies with more employees and bigger funding rounds, which would increase its wealth management demand. As the IPO pipeline grows, Morgan Stanley is positioning itself to provide all the critical financial advice employees will need.