Morgan Stanley Access Investing at a glance
Pros: Where Morgan Stanley Access Investing stands out
Morgan Stanley Access Investing provides three basic portfolios investors can choose from:
- Impact Portfolio. This portfolio is made up of mutual funds and ETFs that invest in companies that consider ESG issues as part of their businesses.
- Market-tracking portfolio. This portfolio is comprised entirely of ETFs and offers diversification across asset classes and geographies. It is designed to track a broad market index and comes with the lowest fees.
- Performance-seeking portfolio. This approach will seek to optimize returns based on your selected risk tolerance by investing in mutual funds and ETFs that Morgan Stanley’s experts think will outperform the market. These funds typically come with higher fees than those that track market indexes.
You’ll also be given the opportunity to select from eight different themes that you can further base your investments around:
- Climate action
- Defense & cybersecurity
- Emerging consumer
- Gender diversity
- Genomics & bio-medicine
- Global frontier
- Inflation conscious
- Robotics + data + artificial intelligence
You can select one theme to drive the types of funds your chosen portfolio will invest in. Gender diversity and climate action are themes that will influence the impact portfolio, while the other six themes are tied to the performance-seeking portfolio. A market-tracking portfolio will seek to minimize fees.
Morgan Stanley checks daily to see if your allocations have drifted from their recommended range and will automatically adjust them if necessary. This automatic rebalancing can help to make sure your portfolio allocations haven’t drifted too much due to market gains or losses, or withdrawals and contributions.
If you choose, Morgan Stanley will also automatically check your portfolio for tax-loss harvesting opportunities, which means they’ll look for ways to intentionally realize losses to lower your tax bill. They’ll also reinvest your “harvested” losses so you don’t miss out on potential gains by being out of the market.
The tax strategy stands out when compared to other advisors that target small investors such as Acorns and Stash, which don’t offer any tax strategy services to their customers. Other advisors such as Schwab Intelligent Portfolios offer tax-loss harvesting, but only for customers with assets of at least $50,000.
With an annual management fee of 0.30 percent, Morgan Stanley falls in the middle of the range for robo-advisors. While 0.30 percent doesn’t sound like much, that means it will cost $30 for every $10,000 you have invested. These fees can really add up over time and ultimately take away from the return you earn as an investor, but they are still less than what you’d typically pay with a traditional financial advisor, where fees might hit one percent of your assets annually.
Morgan Stanley comes in above other robo leaders such as Betterment and Wealthfront which both charge 0.25 percent annually, but is better than Marcus Invest, which charges 0.35 percent and doesn’t offer services such as tax-loss harvesting.
Morgan Stanley Access Investing offers a suitable robo-advisor platform for young investors who are particularly interested in how they’re invested, but there are cheaper offerings with a broader array of tools available from other advisors. By offering portfolios that are geared toward themes and issues such as ESG or new technology, Morgan Stanley investors can prioritize what matters most to them. But those investments typically come with higher fees, which ultimately eat into returns.
Customers looking for cheaper alternatives might consider Wealthfront, Ellevest or SoFi Automated Investing. Those who’d like the option of speaking with a human advisor could turn to Betterment or Schwab Intelligent Portfolios.
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