Morgan Stanley Courts Startup Employees With Stock-Plan Deal
By Justin Baer
Morgan Stanley is betting a partnership in Silicon Valley will
lead to new long-term clients for its wealth-management
The bank said Tuesday that it struck a deal with Wilson Sonsini
Goodrich & Rosati to take over the stock plans the law firm
manages for thousands of clients. Terms of the deal weren't
disclosed. Startups often offer stock as part of an employee's pay.
Wilson Sonsini created its own stock-plan software decades ago to
help clients track the value of their employees' holdings as
companies matured from early-stage startups and raised outside
money to finance their growth.
Morgan Stanley is pushing into stock-plan administration as an
early entree into the financial lives of a new generation of
customers. Some of those clients, the bank hopes, will turn to it
for more lucrative services, such as advice, as their needs grow
more complex. The digitization of finance has unleashed low- or
no-cost services, such as commission-free trades and zero-fee
investment funds, that money managers are deploying to attract new
The Wilson Sonsini agreement aims to give Morgan Stanley a leg
up in cementing connections with startups and their employees
before a possible public offering. Some will become millionaires
overnight; Google Inc., LinkedIn, Twitter Inc. and Lyft Inc. are
among the companies the law firm helped take public.
Morgan Stanley paid $900 million to acquire Solium Capital Inc.
in 2019, adding a platform that specialized in privately held firms
and last year bought E*Trade Financial Corp., which manages stock
plans for hundreds of companies, for $13 billion.
"This agreement, along with the acquisition of Solium and the
corporate-services business from E*Trade, is a part of our
long-term strategy to be the premier provider of financial
solutions to workplace employees," Jed Finn, head of corporate and
institutional solutions for Morgan Stanley's wealth-management
The Wilson Sonsini clients' employees will gain access to other
services, including Morgan Stanley's financial-wellness programs,
self-directed investing accounts and student-loan consolidation
plans offered by E*Trade, and the bank's network of financial
The partnership may also forge stronger ties between those
clients and other Morgan Stanley businesses, including its
Morgan Stanley manages plans for more than 3,900 companies and
their 4.9 million employees, and expects to add several thousand
corporate clients through its arrangement with Wilson Sonsini,
people familiar with the deal said.
Morgan Stanley's wealth-management business has $4 trillion in
The Wilson Sonsini clients aren't required to migrate to Morgan
Stanley's platform, and those who do move to the bank won't have to
pay more than they had previously to track stock plans, the people
Wilson Sonsini plans to phase out its own stock-plan service. In
recent years, a group of upstart and established financial-services
firms have seized on the employee-stock-plan business, investing
heavily in technology that offered companies an array of new
Carta Inc., a startup backed by Andreessen Horowitz, and Nasdaq
Inc.'s Nasdaq Private Market have launched exchanges to help
private-company employees and investors trade their shares.
Write to Justin Baer at email@example.com
(END) Dow Jones Newswires
February 23, 2021 09:14 ET (14:14 GMT)
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