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Cash windfall at Morgan Stanley
Old 05-07-2012, 02:51 PM   #1
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Cash windfall at Morgan Stanley

A friend of mine had a good sum of cash winfall and the money is with Morgan Stanley. I just looked up a fund (S&P Class C - SPICX) and compared it with Vanguard (VFINX) and the fee difference between the two is HUGE. I haven't compared any other funds, but I have a feeling the fee difference is throughout.

Why would anybody keep their money at Morgan Stanley? Some benefits using Morgan Stanley over Vanguard or Fidelity??
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Old 05-07-2012, 04:02 PM   #2
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Old 05-07-2012, 05:36 PM   #3
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Originally Posted by tmm99 View Post
A friend of mine had a good sum of cash winfall and the money is with Morgan Stanley. ... Why would anybody keep their money at Morgan Stanley? Some benefits using Morgan Stanley over Vanguard or Fidelity??
Why don't you ask your friend why he/she chose Morgan Stanley? Let us know what he/she says.
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Old 05-07-2012, 06:12 PM   #4
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Why don't you ask your friend why he/she chose Morgan Stanley? Let us know what he/she says.
The windfall happend to be with Morgan Stanley.
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Old 05-07-2012, 06:16 PM   #5
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Why would anybody keep their money at Morgan Stanley? Some benefits using Morgan Stanley over Vanguard or Fidelity??
Like many here, I'm very money-sensitive. I look for ways to save money, especially on ongoing (typically monthly) expenses.

I'm finding that we're an exception to what is 'out there' in the rest of the world.

Example: I recently figured out that our natural gas (for home heating, etc.) was deregulated by the state a while back and we can now choose from a state-approved list of about 20 suppliers. This is similar to being allowed to select a different long-distance phone company instead of AT&T.

The former (near-monopoly) gas company will still provide distribution, service, and billing ...and choosing a new supplier will only result in a single line change on the monthly bill. I found an approved supplier that offers gas at $2.99/mcf (as compared to the near-monopoly that is bragging about their new low $5.26/mcf rate!). I'm estimating a monthly average savings of $15-$20 on my well-insulated house.

Do you think I can convince anyone to switch (and it only takes 5 minutes online)? Only one person so far. No one else is the least bit interested.

I chalk it up to most people would rather keep doing what they've always done...even if it's more expensive.

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Old 05-07-2012, 06:28 PM   #6
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I hear you omni. Sometimes we keep things the way they are out of laziness or sometimes out of ignorance (but ignorance may be because we are being lazy.)

But some other times, we make a conscious decision to do things in the way it saves us less money. For example, I keep about 15K with BofA - I would be making more money if I had this on ING, but I want some money where I can get to quickly and easily, just by going to the bank a block from here. The account is already hooked up with direct money transfer to my mom if she ever needs something in a hurry. It gives me peace of mind.

I was just wondering if anybody used Morgan Stanley and why they chose it.
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Old 05-07-2012, 06:43 PM   #7
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You didn't describe the nature of the investment that created the windfall, so it's kind of an apples and oranges question.

If the reinvestment of the windfall is going back into a high risk / high reward investment, then Morgan Stanley MAY offer good value in that arena. Certainly more choices. I wouldn't look to Vanguard for beaver cheese futures opportunities.

On the other hand, if the friend is looking for good value in an S&P 500 index fund, then the 1.27% expenses of SPICX is a poor choice.

It all starts with asset allocation. After defining investment goals, the first decision is what to invest in, followed by a comparison of funds and their costs.

If the friend asked for my advice and I learned he is looking to take the index fund route, then I'd suggest he check out Vanguard, Fidelity or Schwab. All are likely to offer better expense ratios than Morgan Stanley. And I wouldn't feel any sense of financial loyalty to MS - they made plenty on whatever created the windfall.

One other question I'd ask the friend - there wasn't any return of capital in the windfall, was there? This is a particular issue common to closed-end funds and some mutual funds.
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