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Netwealth's Agreement With Morgan Stanley Represents First Mainstream Broker to Adopt Firm's Architecture, Jefferies Says

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Netwealth Group's (ASX:NWL) agreement with Morgan Stanley Wealth Management represents the first mainstream, scale broker to adopt its architecture, and revenue contributions are expected to become clearer in time, Jefferies said in a note on Tuesday.

The company expanded its existing relationship with Morgan Stanley to provide a domestic platform covering ASX-listed equities and other domestic investments, bundling execution, administration, reporting, and integrated iHIN capability into a single offering.

The Morgan Stanley book skews heavily to high net worth, implying some revenue margin dilution offset by higher revenue per account.

The non-custodial offering, which was launched around two years ago, is gaining traction, with around 20% of assets sitting off-platform in non-broking PW firms, pointing to an incremental reporting and admin revenue pool.

The investment firm reaffirmed a buy rating on Netwealth with a AU$30.25 price target.

Netwealth Group's shares tumbled 4% in recent Wednesday trade.

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