Morgan Stanley's $13 billion purchase of discount brokerage E-Trade is yet another example of a big Wall Street firm trying to appeal to smaller investors.
"This industry for three decades or more has always been moving upmarket," said Dennis Gallant, a senior analyst at consulting firm Aite Group. "All firms are [now] moving to target smaller investors."
"If you are an existing E-Trade customer, there's the potential down the road that things are going to change, whether it be account structure, pricing or offerings," said Greg McBride, CFA, chief financial analyst for Bankrate.com. "That can change for better or worse." Robo-advisors like Betterment and Wealthfront that rose to prominence in the early part of the last decade use algorithms to manage money for investors more cheaply. Giants like Vanguard Group and Charles Schwab have since seized on the trend and meshed robo-advisors into their traditional financial-advice operations.
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