Morgan Stanley suffered a breakdown on its wealth management platform, the lender’s biggest moneymaker, but the reason wasn’t those orders flooded in amid historic market rout.
The outage was first reported by CNBC earlier on Wednesday, citing a recorded message on the bank’s customer service.
The US bank’s platform that caters to its wealth-management clients broke down afternoon, the report said, adding that the shutdown happened due to a technical issue and not related to an overwhelming volume that halted other platforms over the last two weeks.
Morgan Stanley is a global investment bank and wealth management firm, employing more than 60,000 people worldwide. The Wall Street giant makes money primarily from three main units: institutional securities, wealth management, and investment management.
The American lender moved further from its core origins with an agreement to buy the discount brokerage firm E-Trade for about $13 billion, joining the battle for middle America’s wealth management market.
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The addition of E-Trade would allow Morgan Stanley to tap into a new source of revenue through an additional 5.2 million customer accounts and $360 billion in assets.
The takeover would also give Morgan Stanley a significant share of the market for online trading and puts it on firmer footing with competitors like Bank of America and Wells Fargo.
A bad week for wealthy clients
Two trading platform failed at JPMorgan Chase & Co, including one that caters to wealth-management clients when the financial markets were in chaos last week.
A further possible cause of the JPMorgan issue was instability in a part of their infrastructure that was put in place to help systems accommodate the high volume. This had resulted in “prolonged delay in providing clients with order status and execution updates,” the US bank said.
During the market turbulence, other platforms that cater to retail investors have also experienced difficulties, resulting in clients getting kept out of the market during sensitive times. Robinhood, Fidelity, TD Ameritrade and Charles Schwab, experienced trading downtime amid heavy trading volumes, before managing to restore its systems.