Morgan Stanley bought E-Trade in 2020 for $13 billion
Morgan Stanley, one of the largest investment banks in the United States, acquired E-Trade Financial Corporation in October 2020. The deal closed after regulatory approval, and E-Trade became a wholly owned subsidiary of Morgan Stanley. This was a major consolidation in the brokerage industry, bringing together two companies with very different customer bases and business models.
Before the acquisition, E-Trade operated as an independent publicly traded company. Customers could buy and sell stocks, options, mutual funds, and exchange-traded funds (ETFs) through E-Trade's platform. Morgan Stanley, by contrast, is primarily an investment bank and wealth manager that serves institutional clients, corporations, and high-net-worth individuals. The purchase gave Morgan Stanley direct access to E-Trade's retail customer base of millions of individual investors.
Key Takeaways
- Morgan Stanley completed its purchase of E-Trade in October 2020 for approximately $13 billion.
- E-Trade continues to operate as a separate brand and platform under Morgan Stanley ownership, and existing customer accounts remain unchanged.
- Morgan Stanley has integrated E-Trade's technology and customer base into its broader wealth management division.
- Account features, trading capabilities, and customer service have remained largely the same since the acquisition closed.
What happened to E-Trade accounts after the acquisition
If you held an E-Trade account before or during the acquisition, your account was not closed or transferred to a different platform. E-Trade continues to operate under its own brand name, and you can still log in using your existing username and password. Your positions, cash balances, and transaction history remained in place.
Morgan Stanley did not force existing E-Trade customers to move their accounts to Morgan Stanley's platforms. However, the company has gradually integrated E-Trade's technology infrastructure with Morgan Stanley's systems. Over time, some features and tools have been updated or replaced, but the core ability to trade stocks, options, and other securities through E-Trade has continued without interruption.
New customers can still open E-Trade accounts through the E-Trade website and mobile app. The account opening process, minimum deposit requirements, and fee structures have remained consistent with what E-Trade offered before the acquisition, though Morgan Stanley has made periodic changes to commissions and other pricing.
Why Morgan Stanley wanted to buy E-Trade
Morgan Stanley's primary goal was to expand its retail customer base. Before the acquisition, Morgan Stanley's wealth management division served mostly affluent clients and institutions. E-Trade had millions of individual retail investors with smaller account sizes, which represented an entirely different market segment. By owning E-Trade, Morgan Stanley could offer brokerage services to this much larger population.
The acquisition also gave Morgan Stanley access to E-Trade's technology platform and infrastructure. E-Trade had invested heavily in its trading platform, mobile app, and customer service systems. Rather than build these systems from scratch, Morgan Stanley could leverage E-Trade's existing technology to serve more customers.
Additionally, the deal positioned Morgan Stanley to compete more directly with other large brokerages like Fidelity, Charles Schwab, and TD Ameritrade. These competitors had already built substantial retail businesses, and Morgan Stanley wanted a comparable footprint in the retail investing market.
How the acquisition affected E-Trade's fees and commissions
E-Trade had already eliminated stock and ETF trading commissions before Morgan Stanley acquired the company. This change happened in 2019, in line with industry-wide moves by competitors like Charles Schwab and Fidelity. After the acquisition, Morgan Stanley maintained this zero-commission structure for stocks and ETFs.
Options trading still carries a per-contract fee on E-Trade, typically $0.65 per contract, though this varies based on account type and trading volume. Margin interest rates, account maintenance fees, and other charges have remained largely unchanged since the acquisition. Morgan Stanley has not significantly raised fees across the board, though it has made targeted adjustments to certain services and account tiers.
Some premium services, such as E-Trade's professional trading platform and advisory services, have pricing that reflects Morgan Stanley's broader service offerings. Customers who want access to Morgan Stanley's wealth advisors or institutional-grade tools may see different fee structures than basic E-Trade account holders.
Integration with Morgan Stanley's other services
Morgan Stanley has been gradually integrating E-Trade with its broader wealth management ecosystem. This means E-Trade customers can now access some Morgan Stanley services, and Morgan Stanley clients can use E-Trade's trading platform. However, the integration has been gradual and has not forced customers to consolidate their accounts or change their primary platform.
For example, a customer with both an E-Trade brokerage account and a Morgan Stanley wealth advisory relationship can now view holdings across both accounts in some cases. Morgan Stanley has also made it possible for E-Trade customers to transfer accounts to Morgan Stanley's platforms if they choose to do so, though this is optional.
The company has invested in updating E-Trade's technology to align with Morgan Stanley's systems, but the E-Trade brand and platform remain distinct. Morgan Stanley has not announced plans to shut down E-Trade or force all customers to migrate to Morgan Stanley's platforms.
What this means for current and prospective E-Trade users
If you currently use E-Trade, the acquisition has had minimal direct impact on your day-to-day experience. You can continue to trade stocks, options, and other securities through the same platform you have been using. Your account statements, tax documents, and customer service remain available through E-Trade's channels.
If you are considering opening an E-Trade account, the acquisition does not change the basic value proposition. E-Trade still offers commission-free stock and ETF trading, a mobile app, research tools, and customer support. The fact that Morgan Stanley owns E-Trade may actually provide additional stability and resources for platform improvements, though this is a long-term consideration rather than an immediate benefit.
One potential advantage of Morgan Stanley's ownership is access to Morgan Stanley's research and advisory capabilities. Some E-Trade customers may eventually have the option to consult with Morgan Stanley advisors, though this typically comes with higher account minimums or advisory fees.
Frequently Asked Questions
Can I still use my E-Trade account the same way I did before Morgan Stanley bought it?
Yes. E-Trade operates as a separate brand under Morgan Stanley ownership, and the core trading platform, account features, and customer service have remained largely unchanged. You log in the same way, trade the same securities, and receive statements the same way as before the acquisition.
Will Morgan Stanley force me to move my E-Trade account to Morgan Stanley's platform?
No. Morgan Stanley has not announced any plans to force existing E-Trade customers to migrate their accounts. The company has made it possible for customers to transfer accounts if they choose to, but this is entirely optional. E-Trade continues to operate as a distinct platform.
Did E-Trade's commissions or fees change after Morgan Stanley bought it?
Stock and ETF trading commissions remained zero after the acquisition, as they had been before. Options trading still carries a per-contract fee. Morgan Stanley has made some adjustments to certain services and account types, but there was no across-the-board fee increase tied to the acquisition.
Is my money safe in an E-Trade account now that Morgan Stanley owns it?
E-Trade accounts are protected by the Securities Investor Protection Corporation (SIPC), which insures cash and securities up to $500,000 per account. This protection existed before the acquisition and continues now. Morgan Stanley's ownership does not change SIPC coverage or the regulatory oversight of E-Trade accounts.
Can I access Morgan Stanley services through my E-Trade account?
Some integration between E-Trade and Morgan Stanley services has occurred, but it is limited and optional. You may be able to view holdings across both platforms if you have accounts at both companies, and you can transfer accounts between them if you choose. However, you do not need a Morgan Stanley relationship to use E-Trade.