Client Service November 14, 2024

Morgan Stanley Partners to Provide Equity, Retirement Services to Newly Public Companies

The firm’s new relationship with Carta would give its Morgan Stanley at Work services first-mover status with companies doing an IPO.

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Morgan Stanley’s workplace services division has signed a deal to be the exclusive provider of workplace benefits and financial planning services to late-stage private companies who are listing publicly.

Through the deal, announced Tuesday, Morgan Stanley at Work will sync up with Carta Inc., a company that assists private companies, funds and limited partners, in both venture capital and private equity, with initial public offerings. When those firms go public, they will be teed up first to go with Morgan Stanley at Work’s services, including executive equity solutions, general financial wellness programs and retirement planning services.  

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“Based on each client’s unique needs and situation, Morgan Stanley at Work will offer referred corporate clients additional workplace solutions, including retirement services, deferred compensation, financial wellness, saving and giving solutions, and executive services during their transition to becoming a public company,” Shawn Murphy, head of private markets at Morgan Stanley at Work, said via email.

Morgan Stanley at Work’s Issuer Strategy team can also initially “conduct a detailed transaction readiness assessment for referred clients, which is the process of enabling shares of a private company’s stock to be bought, sold, transferred or acquired in preparation for a monetization event, like an IPO, tender offer or M&A event,” Murphy wrote.

She noted additional services such as capital markets and investment banking services, wealth management and financial advisory services, private wealth management, family office and access to E*Trade.

Morgan Stanley’s leadership has, in recent earnings calls, talked about the growth found when workplace solutions lead to wealth management business.

Jed Finn, the head of Morgan Stanley Wealth Management, in a statement about the Carta deal, pointed to the current strength of the private market that is leading to companies staying private for longer—in turn gaining size and scale before going public.

“As a result, the next wave of IPOs may include some of the largest, most sophisticated companies to ever go public,” Finn said. “Participants within these companies will need not just equity administration, but all the advice, guidance and financial planning that comes with a significant liquidity event.”

San Francisco-based Carta, founded in 2012 as eShares Inc., which is still its official name, has almost 2,000 companies preparing for IPO, according to the firm. The company represents about $130 billion in assets under management and works with about 7,000 funds and special purpose vehicles.

Those companies that choose to stick with Morgan Stanley at Work in the transition will get the firm’s “experience in supporting public companies across a full spectrum of offerings, from its premier investment banking franchise to the investment and wealth management divisions that can cater to participants at every stage of their wealth journey,” according to the announcement.

Morgan Stanley launched its workplace division in 2019.

Client Service November 13, 2024

Advisers Urged to Enter Health Plan Advising

Panelists highlighted concerns with major insurers’ fee practices and control over care pathways.

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Photograph by Matt Kalinowski
Photograph by Matt Kalinowski

At the PLANADVISER 360 conference in Scottsdale, Arizona, on Tuesday, health care experts discussed the growing need for financial advisers to expand into health care plan advising, emphasizing the potential economic impact and the demand for fiduciary oversight.

Panelists outlined the industry’s problematic structures, shedding light on how major players like Blue Cross Blue Shield, UnitedHealthcare, Cigna and Aetna allegedly obfuscate fees and manage care pathways in ways that could pose conflicts of interest.

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Jamie Greenleaf, co-founder of Fiduciary In A Box, pointed to what she called the “BUCA”—for health care insurers Blue Cross Blue Shield, UnitedHealthcare, Cigna and Aetna—as creating an environment such that “money is often hidden within the system.” She compared this practice to how certain investment platforms previously limited investment options to their own funds, thereby obscuring fees.

“They’re hiding things among the different pieces of the puzzle that employers are using,” Greenleaf said.

Hugh O’Toole, CEO of Innovu, echoed this sentiment, specifically singling out UnitedHealthcare.

“They are the largest owner of primary care in the country,” O’Toole said. “They own the entire value stream, which includes directing patients to specific primary care providers for their benefit.”

O’Toole suggested that the current system, which has created an industry on which almost 20% of U.S. gross domestic product is spent, requires urgent reform. “Moving this down even to 15% could have a monumental impact on the economy,” he added, highlighting bipartisan support for health care reform through the Consolidated Appropriations Act, which survived transitions between the administrations of former President Donald Trump and President Joe Biden.

Expanding Fiduciary Duty to Health Care

As advisers navigate the evolution of their roles, the question arose: Should they also provide fiduciary services for employers’ health plans? Sean Bjork, president of Bjork Asset Management, moderated the panel, prompting the speakers to consider this opportunity and asking how advisers might approach such a shift.

Greenleaf responded by outlining a natural progression for financial advisers. She reflected on the industry’s evolution from brokers to fiduciaries and emphasized that a similar model could apply to health care. “I’m more of a fiduciary consultant now,” she said, noting that advisers do not need deep expertise in health care to guide employers through a fiduciary process. Instead, they need the curiosity to “ask the hard questions.”

Greenleaf described advisers’ potential impact: “You’ve made a difference in retirement; now it’s time to make a difference in health care by running a fiduciary process and identifying red flags.”

Looking Ahead for Advisers

The panelists concluded that while the transition may be challenging, advisers are well-positioned to make an impact. Greenleaf stressed that as fiduciary advisers for health plans, advisers can help employers navigate complex fee structures and compliance issues, just as they have done for retirement plans.

“Employers are seeking help to fulfill their fiduciary duties, and advisers are uniquely equipped to sit at the table and advocate for them,” she said.

Greenleaf and O’Toole were aligned on the idea that as health care reform continues to be a bipartisan priority, advisers’ expanded roles could contribute to a more transparent and accountable system, ultimately benefiting employers and employees alike.

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