Morgan Stanley’s annual mutual fund and ETF support-fee scorecard reveals a change at the top of the food chain in 2021.
The firm last month released its annual revenue-sharing update, which is a proxy for the mutual and exchange-traded fund providers Morgan Stanley’s network of more than 15,000 advisors use most.
Asset managers pay as much as 0.10% of assets held within client accounts at the wirehouse, though the rates each family pays are tiered. The tiers are tethered to the fund’s management fees, the disclosure notes.
The new list shows that, during 2021, Franklin Templeton jumped into the 2021 top spot, leaving American Funds, 2020’s top-spender, as the runner-up.
Franklin’s ascendance is, in part, a result of the fact that 2021 was the first full year after its acquisition of Legg Mason, which was seventh on the 2020 edition of this list and has deep roots in Morgan’s system reaching back to the fund firm’s affiliation with Smith Barney and Citigroup. Morgan Stanley acquired Smith Barney’s wealth unit during the financial crisis.
The scorecard does not list the actual fees paid, but it does show that 114 fund managers each paid Morgan at least $250,000 in revenue-sharing fees in 2021.
The only other significant change at the top of the list is Morgan Stanley’s own fund family jumping up two slots to No. 3 in 2021. This move also may be a matter of consolidation, specifically, Morgan Stanley’s acquisition of Eaton Vance (11th on the 2020 list) some 17 months ago.
BlackRock Funds, No. 4, and Invesco, No. 5, round out the top five fee-payers. One thing that didn’t change much? The list of firms in the top 15 year-over-year.
In its second-quarter filing, Morgan Stanley reported total client assets for the wirehouse of $3.43 trillion. Of that, about $1.7 trillion sat in fee-based accounts, according to the quarterly financials.
Big Spenders Annual ranking of fund managers, based on revenue-sharing fees paid to Morgan Stanley. M&A activity pushed several firms up the list last year. Source: Morgan Stanley July 2022 disclosure. 2021 2020 2019
Franklin Templeton / Legg Mason 1 American Funds 1 American Funds
American Funds 2 Franklin Templeton 2 Legg Mason
Morgan Stanley / Eaton Vance 3 Invesco 3 Invesco
BlackRock Funds 4 BlackRock Funds 4 BlackRock Funds
Invesco 5 Morgan Stanley 5 JP Morgan
JP Morgan 6 JP Morgan 6 First Eagle Funds
Pimco 7 Legg Mason 7 Franklin Templeton
Columbia Management 8 First Eagle Funds 8 Morgan Stanley Funds
MFS Investments 9 MFS Investments 9 Nuveen Funds
Lord Abbett Funds 10 Pimco 10 Lord Abbett Funds
First Eagle Funds 11 Eaton Vance 11 MFS Investments
Virtus 12 Lord Abbett Funds 12 Pimco
Prudential investments 13 Nuveen Funds 13 Eaton Vance Group
Nuveen Funds 14 Columbia Management 14 Virtus
T Rowe Price Funds 15 Prudential Investments 15 Prudential investments