Morgan Stanley bought E*TRADE in 2020

Morgan Stanley, a major investment bank and financial services company, purchased E*TRADE from its previous owner in October 2020 for approximately $13 billion. The deal closed after regulatory review, and E*TRADE became a subsidiary of Morgan Stanley rather than an independent company.

Before the Morgan Stanley acquisition, E*TRADE was owned by Alex. Brown (a division of Deutsche Bank), which had bought it in 2007. That ownership lasted about 13 years before Morgan Stanley stepped in.

Key Takeaways

  • Morgan Stanley acquired E*TRADE in October 2020 and now operates it as a subsidiary within its broader financial services business.
  • The purchase price was approximately $13 billion, making it one of the largest acquisitions in the retail investing space.
  • E*TRADE continues to operate under its own brand name and website, so existing account holders did not have to move their accounts or start over.
  • Morgan Stanley integrated E*TRADE's retail investing platform with its own wealth management services, allowing customers to access both if they choose.

Why Morgan Stanley wanted E*TRADE

Morgan Stanley bought E*TRADE to expand its retail investing business. Before the acquisition, Morgan Stanley was primarily known for serving wealthy clients and institutional investors. E*TRADE brought millions of individual retail customers who trade stocks, options, and other securities on their own.

The acquisition let Morgan Stanley compete more directly with other large brokers like Fidelity, Charles Schwab, and TD Ameritrade. It also gave Morgan Stanley access to E*TRADE's technology platform and customer base without building those things from scratch. For Morgan Stanley, buying an established platform with millions of active users was faster and less expensive than trying to build a retail investing business on its own.

What happened to E*TRADE accounts after the acquisition

If you had an E*TRADE account before or after the Morgan Stanley purchase, your account did not disappear or transfer to a different company. E*TRADE still exists as a brand under Morgan Stanley's ownership, and your login, account number, and holdings remained the same.

Morgan Stanley did not force existing E*TRADE customers to merge accounts or move to a Morgan Stanley platform. You can continue using E*TRADE the way you always have. However, Morgan Stanley has gradually integrated some services — for example, E*TRADE customers can now access certain Morgan Stanley wealth management tools if they choose to. The key point is that nothing changed automatically; you remain in control of whether to use additional Morgan Stanley services.

How the acquisition affected E*TRADE's features and costs

E*TRADE's core trading features — stock trading, options, mutual funds, and ETFs — remained available after Morgan Stanley took over. The platform itself did not shut down or become unrecognizable to long-time users.

Commission structures and account fees did not change dramatically as a result of the acquisition. E*TRADE, like most major brokers, already offered commission-free stock and ETF trading before Morgan Stanley bought it. Morgan Stanley has not raised E*TRADE's standard account fees or trading costs in ways that were directly tied to the ownership change. The trading experience for retail investors has remained largely consistent.

Morgan Stanley's integration of E*TRADE

Rather than shutting down E*TRADE or merging it completely into Morgan Stanley's existing platforms, Morgan Stanley kept E*TRADE as a separate operating unit. This means E*TRADE customers still log into E*TRADE, not a Morgan Stanley portal.

Behind the scenes, Morgan Stanley has worked to connect E*TRADE's technology with its own systems. This integration allows E*TRADE customers to move money between E*TRADE and Morgan Stanley accounts more easily, and it gives Morgan Stanley advisors better visibility into E*TRADE customer holdings if those customers want wealth management help. The integration is designed to make it simpler for customers who want to use both platforms, without forcing anyone to do so.

E*TRADE's history before Morgan Stanley

E*TRADE was founded in 1982 and went public in 1996. For much of its early history, it was an independent company and a pioneer in online retail investing. In 2007, Deutsche Bank's Alex. Brown division bought E*TRADE, and it remained under that ownership until Morgan Stanley's 2020 purchase.

During its time as an independent company and under Alex. Brown, E*TRADE built the platform and customer base that made it attractive to Morgan Stanley. The company survived the 2008 financial crisis, the rise of commission-free trading, and competition from newer brokers. By the time Morgan Stanley acquired it, E*TRADE had established itself as one of the largest retail investing platforms in the United States.

Frequently Asked Questions

Do I need to do anything with my E*TRADE account now that Morgan Stanley owns it?

No. Your account continues to work as it did before. You do not need to transfer funds, change your login, or take any action. Morgan Stanley has not required existing E*TRADE customers to move or consolidate accounts.

Can I still use E*TRADE the same way I did before?

Yes. E*TRADE's trading platform, research tools, and account types remain available. The website and mobile app work the same way. Morgan Stanley kept E*TRADE operating as a distinct brand rather than folding it into its own platforms.

Will Morgan Stanley close E*TRADE in the future?

There is no announced plan to shut down E*TRADE. Morgan Stanley has invested in keeping it running as a separate business unit. However, companies can change strategy, so there is always some possibility of future changes. For now, E*TRADE continues to operate normally.

What is the difference between E*TRADE and Morgan Stanley now?

E*TRADE is a retail investing platform focused on self-directed traders and investors. Morgan Stanley is a full-service investment bank that also offers wealth management and advisory services. E*TRADE is now owned by Morgan Stanley, but they serve different customer needs and operate on different platforms.

Can E*TRADE customers access Morgan Stanley services?

Some integration exists, and E*TRADE customers can explore Morgan Stanley's wealth management and advisory services if they want. However, you are not required to use Morgan Stanley services just because you have an E*TRADE account. The two remain separate offerings.