Morgan Stanley muscles in on traditional bank accounts with CashPlus

Dive Brief:

Morgan Stanley on Thursday announced the launch of a brokerage account for its wealth management clients, CashPlus, that it’s billing as "a modern alternative to banking."
The two varieties of CashPlus accounts offer perks meant to differentiate them from traditional bank accounts, such as unlimited ATM fee rebates, unlimited check writing, and no foreign transaction fees or cash advance fees. Users also will be able to get cash from banks or tellers that accept Mastercard.
The investment bank’s offerings mark the latest encroachment on traditional banking from a company outside that sphere. Fellow investment bank Goldman Sachs launched Marcus, its digital-only consumer bank, in 2016. Deposits on the platform reached $60 billion in 2019, the bank reported in an earnings call last week.

Dive Insight:

Tech firms are using checking accounts in particular as an inroad to banking. Google in November announced its intention to create checking accounts backed by Citi. Amazon may still be discussing a checking account product after abandoning its effort last year, according to The Information.

For Morgan Stanley, the shift in strategy comes on the heels of a December announcement that the bank is cutting 1,500 jobs, or 2% of its workforce. It's also reducing bonuses staff-wide, starting with CEO James Gorman, who is taking a 7% pay cut.

The bank’s CashPlus accounts, which replace its Premier Cash Management program, come with online banking, a mobile app through which account holders can set alerts, a debit card that users can lock and unlock, direct deposit availability, online bill pay, person-to-person payments through Zelle, and access to Morgan Stanley credit cards from American Express.

To avoid a monthly fee, Premier CashPlus requires either $2,500 in total monthly deposits or $25,000 in average daily balances. Platinum CashPlus requires both $5,000 in total monthly deposits and $25,000 in average daily balances.

The bank also will make an exception to existing clients who rely on Social Security as their sole source of income. Both CashPlus account varieties waive the total monthly deposit thresholds in exchange for Social Security deposits of any amount.

Both CashPlus accounts include access to credit and identity protection monitoring service through Experian, as well as Securities Investor Protection Corp. and Federal Deposit Insurance Corp. coverage.

"Clients have an alternative to a bank experience designed around their needs," Paul Halpern, head of deposits and banking services for Morgan Stanley Private Banking Group, said in a news release Thursday. "They receive personalized service and advice, exceptional value, enhanced protection and a digital-first experience."