Fidelity vs Morgan Stanley

Fidelity vs Morgan Stanley vs Vanguard, TD Ameritrade, Etrade, and Charles Schwab.


Morgan Stanley vs Fidelity (and Others): Fees


Broker Fees Stocks/ETFs
Commissions
Mutual Funds
Commissions
Options
Commissions
Maintenance
Fees
IRA Annual
Fees
Ally Invest Fees $4.95 $9.95 $4.95 + $0.65 per contract $0 $0
Etrade Fees $6.95 $19.99 $6.95 + $0.75 per contract $0 $0
Ameritrade Fees $6.95 $49.95 $6.95 + $0.75 per contract $0 $0
Fidelity Fees $4.95 $49.95 $4.95 + $0.65 per contract $0 $0
Schwab Fees $4.95 $76 ($0 to sell) $4.95 + $0.65 per contract $0 $0
Vanguard Fees $7-$20 $8-$35 $30 + $1.50 per contract $20** see

** Vanguard is charging $20 annual maintenance fee (waived if user chooses to receive statements and other information electronically).


Morgan Stanley vs Charles Schwab (and Others): Services


Broker Review Investment Products Trading Tools Customer Service Research Overall Rating
Ally Invest
TD Ameritrade
Etrade
Fidelity
Charles Schwab
Vanguard
Morgan Stanley


Morgan Stanley vs Vanguard (and Others): Review


Morgan Stanley Wealth Management is the full-service brokerage subsidiary of the investment bank Morgan Stanley, one of the iconic financial institutions in the United States. Morgan Stanley is synonymous with Wall Street and the global economy and has a long and storied history. They’ve joined the online brokerage bandwagon with their Wealth Management division. Let’s see how they compare with the major online discount brokerages.


Pricing

Morgan Stanley Wealth Management is a brokerage for high net worth accounts. Minimum assets under management must be $250,000. This entitles an investor to a team of two or more dedicated advisors who handle separate facets of the client’s financial situation. For example, one advisor might focus on retirement accounts, another on taxable investments and tax issues, a third perhaps focusing on a client’s business investments.

Their cryptic website reveals little about account fees and charges without a long and circuitous search. Nothing about commissions is easily found. It’s remindful of the old saying, “If you have to ask the price, you can’t afford it.”

The straightforward commission model, meaning a commission is paid for each trade execution, varies from $50-$95 depending on the size of the trade. Large lots usually generate a larger commission. When compared to discount brokers such as Ally Invest and Etrade, with equity trades costing $4.95 and $6.95, respectively, Morgan Stanley’s $50 minimum seems excessive. But remember that Morgan Stanley provides a full-service broker to advise a client every step of the way on equity trades, so compensation for the individual advisor is built into the commission.

Morgan Stanley also offers a Wrap Account, whereby investors are charged annual fees of 1% of assets but incur no individual commissions on any stock, bond or mutual fund trades. However much a bargain a 1% annual fee seems to be, investors need to remember that 1% of an account with assets of $250,000 is $2,500. This is equivalent to 50 trades placed at the basic $50/trade level. Only customers who are active traders and execute well over 50 trades per year should even consider the Wrap Account based on trading frequency. But if a frequent trader amasses 500 or more trades per year, the cost per trade drops to a very competitive $5 per trade, or less, on that same $250,000 account. That said 500 trades in a year are equal to almost 10 trades per week and qualifies an investor for day trader status.

For mutual funds, Morgan Stanley’s standard $50-$95 commission becomes more competitive, but they don’t offer any funds with No Transaction Fees (NTF). This becomes a non-issue with the Wrap Account, but most discount brokers offer at least their own family of funds with an NTF provision. TD Ameritrade and Etrade offer thousands of NTF mutual funds.


Fidelity vs Morgan Stanley


Services

Service from Morgan Stanley comes in the way of worldwide research, personal financial advisory services, and a full array of investment products whose availability is based on an individual’s assets and degree of sophistication. Since Morgan Stanley doesn’t cater to independent investors, they don’t offer the usual array of trading platforms, online calculators, or access to research such as Zack’s and Morningstar. They shine when it comes to global research and in-depth domestic research. Their account view page is basic but easy to understand, with tabs linking the investor to research, reporting and accounting, and payments and transfers.

Customer service is rated five-stars, on par with the best discount brokers despite the fact that research and trading tools are average at best. Obviously, the team advisor approach for the wealthy clients is where Morgan Stanley shines with its customer service.


Our Recommendations

Morgan Stanley caters to wealthy clients, who usually have different needs than the average independent investor. Commissions and other fees are secondary to elite service and exclusive research and insight generated by an extensive team of experts. For an active trader of mutual funds, the Wrap Account is reasonably competitive regarding commissions to many discount brokers, but still falls far behind mutual fund commission leaders TD Ameritrade, Etrade, Fidelity, and Ally Invest.

Cost-conscious investors should consider low commission leader Ally Invest. Investors with accounts more than $250,000 should look at Vanguard as an alternative to Morgan Stanley. Vanguard’s commissions for accounts eligible for their Voyager Service ($50,000- $500,000) become very competitive with the low-commission brokers, and Vanguard has begun offering advisory services as well. They may not be as extensive as Morgan Stanley’s may, but sophisticated investors who do most of their own research might find Vanguard to be a good compromise.

All brokers have strengths and weaknesses, and investors should carefully research all options to find the broker that best fits their asset level, amenity level, and trading requirements (brokerage reviews and fees links are in tables above).


New Account Promotions

Ally Invest: Up to $3,500 cash bonus + commission free trades for new accounts.

TD Ameritrade: Trade free for 60 days + get up to $600.

Charles Schwab: Make $100,000 deposit and get 500 commission-free online equity and options trades.

Etrade: At E*TRADE, get $6.95 trades + 65₵ per options contract.


Updated on 3/2/2018.