(Bloomberg) — Morgan Stanley is doubling down on its efforts to manage the wealth of founders, investors and employees of closely held companies, adding a new designation for advisers focused on the space.
The firm is going to label a couple hundred of its 15,000 financial advisers with a “founders specialist designation,” according to Jed Finn, head of Morgan Stanley’s $6 trillion wealth-management business. The advisers will be able offer products and services tailored to the specific needs of clients whose wealth is concentrated in a private company, particularly around liquidity and asset location.
The move reflects a dramatic shift in recent decades: companies are choosing to stay private for longer, and the number of public companies has dropped by nearly half since the late 1990s. That means that while giants like Apple Inc., which went public in 1980, experienced the vast majority of their growth as a publicly traded company, the likes of SpaceX and OpenAI have soared in value while still private.
“It’s just different than traditional wealth management,” Finn said in an interview. “We know there are lots of clients who are single-position hundred-millionaires who want $3 million to buy their family a house and no one will give them a mortgage. We can model it out.”
Read More: Why Companies Like OpenAI Are Staying Private Longer: QuickTake
Morgan Stanley started working on the initiative last year after hearing about wealth-management challenges from clients of its workplace channel. The firm has sought to build that business since buying stock-plan administrator Solium Capital in 2019. At the end of March, the firm had 6.7 million stock-plan participants, up from 2.7 million five years ago.
“A lot of the people who are holding private-market wealth don’t actually want to diversify, whether it’s a founder or an angel investor or part of the C-suite or just someone who works at the company,” Finn said.
The new designation comes at a time of heightened competition to bank the startup ecosystem. Rival JPMorgan Chase & Co. scooped up First Republic Bank, a San Francisco-based lender that focused on serving wealthy clients, through a government-led auction in 2023. That supercharged JPMorgan’s efforts to become the go-to bank for founders, startups and their venture-capitalist backers.
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