Morgan Stanley wealth management focussing on most-profitable clients for international business

[August 18, 2015] By Olivia Oran

(Reuters) - Morgan Stanley's U.S.-based wealth management business is cutting the number of its foreign accounts to focus on its most profitable customers, a person familiar with the bank's thinking said.

The wealth management business will focus on accounts with at least $500,000 of assets, the person added. Smaller accounts will be served through a Morgan Stanley call center. The company will close accounts in countries whose restrictive rules for off-shore accounts make working with customers too expensive.

The changes come as Morgan Stanley looks to refocus its international business as it develops into one of the fastest growing segments of the bank's wealth management division, the person said.

Morgan Stanley is introducing "a series of refinements" for its international wealth management business, according to a memo sent by the bank's wealth and investment management head Greg Fleming, and head of field management Shelley O'Connor, referring employees to an internal website giving more details.
 

The memo's contents were confirmed by a Morgan Stanley spokesman.

Morgan Stanley will focus on working with customers in more profitable countries, mainly in Latin America and the Caribbean. Bank of America Corp's Merrill Lynch unit announced similar plans in July to create a special team of financial advisers to focus on Canada and Latin America. Other countries receiving more of Morgan Stanley's focus may include parts of Asia such as China and Taiwan.

For more than a decade, global regulators have sought to reduce money laundering through the U.S. financial system. In turn, that has caused many banks to look more carefully at some client activity or to pull out of certain markets entirely.

Royal Bank of Canada shut its wealth management offices in Latin America amid money laundering probes over the last year.

Morgan Stanley has 400 advisers who are U.S.-based and focus on international clients. Those advisers look after $100 billion of assets and work out of 12 offices in the United States.

The bank intends to focus on 60 countries with clients who maintain U.S. accounts. Beginning next year, the company's international client advisers will need to meet certain eligibility criteria, including minimum revenue production from their non-U.S. resident clients.

Morgan Stanley has retreated from on-shore wealth management operations in Switzerland, the UK, Italy, Spain, United Arab Emirates and India over the last two years.

Changes to Morgan's wealth business do not apply to on-shore operations in Hong Kong, Singapore and Australia.

(Reporting by Olivia Oran in New York; Editing by Dan Wilchins and Steve Orlofsky)

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