Morgan Stanley and Vanguard mutual funds
I was a bit surprised about the decision at Morgan Stanley to stop using Vanguard funds and agree with Cullen’s comments on the topic. Then, I read something that pointed out that Morgan Stanley advisors will be free to use Vanguard ETFs. If that’s true, are we perhaps making too much of a deal out of this news? Morgan Stanley advisors will enjoy the same fee compression pressure as the rest of the wire houses and independent broker/dealer firms and fee- based advisory asset levels will continue to grow. If Morgan Stanley advisors utilize more fee-based accounts with low cost ETFs from Vanguard, Schwab, etc. — rather than fee-based accounts with low cost (and no-load) open ended mutual funds, then it seems to me the fiduciary rule won’t be violated.
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