Wealth managers cut fees to win AI’s paper millionaires

{"text":[[{"start":9.28,"text":"Wealth managers are cutting fees and hiring staff around Silicon Valley in a rush to win over workers at OpenAI and Anthropic before their initial public offerings mint a new class of millionaires."}],[{"start":22.36,"text":"Morgan Stanley’s wealth management division last quarter took in more than $74bn in net new assets from IPOs after SpaceX completed its blockbuster listing, through its work managing employee equity plans."}],[{"start":36.48,"text":"When OpenAI and Anthropic follow suit with their own flotations, expected to be within the next 12 months, it will unleash a wave of competition among wealth managers — particularly with advisers affiliated with investment banks such as Morgan Stanley which act on the IPOs."}],[{"start":52.64,"text":"OpenAI alone handed out nearly $11bn in equity pay in 2024 and 2025, its financial statements show, and would rank seventh among US public companies for total employee equity remuneration if it were to list now, despite employing only about 8,000 people."}],[{"start":69.84,"text":"“Showing up from Wall Street in a fancy suit and delivering a classic three-meeting sales process . . . is not the way that these prospective clients will make their decision,” said Jason Van de Loo, chief executive of wealth group Choreo, which has $19bn in regulatory assets under management."}],[{"start":87.16,"text":"Choreo agreed last month to a management fee of less than 0.5 per cent with more than 100 current and former SpaceX employees who negotiated collectively ahead of the company’s listing. Wealth managers commonly charge about 1 per cent of assets, although fees typically decline for larger accounts."}],[{"start":null,"text":""}],[{"start":105.4,"text":"Another manager, Mariner Wealth Advisors, cuts its fees once the number of clients from a company reaches a critical mass."}],[{"start":112.96,"text":"Others, such as Citi, which last month announced a partnership with Palantir, have struck deals directly with employers on favourable terms."}],[{"start":120.32,"text":"Mariner was also trying to win clients by charging separately for pre-IPO tax and equity-compensation planning rather than levying a fee on illiquid shares, said Steve Moyer, director of wealth strategy. After employees sell some shares, they then switch over to a more typical model of paying a fee based on assets under management."}],[{"start":null,"text":""}],[{"start":140.08,"text":"Advisers are also waiving account minimums for some clients."}],[{"start":142.8,"text":"“If they’re in a lock-up or, in the case of Anthropic or OpenAI, they don’t actually have any money today, we’re looking down the road,” said Jessica Caruso, executive managing partner at Mercer Advisors. “We should price them knowing where they’re going to end up versus where they are now.”"}],[{"start":159.52,"text":"Competition for the windfall is also changing companies’ hiring plans, especially around San Francisco, where everyone from Citi downwards is aggressively recruiting advisers as well as clients."}],[{"start":170.08,"text":"“We are hiring faster in the broader Bay Area than we are anywhere else in the firm,” said Mercer’s Caruso."}],[{"start":176.8,"text":"But the new AI wealthy also want services more typically offered to family offices — private wealth management companies for rich individuals — including advice on philanthropy and funding new business ventures. Mercer said it had given some AI employees access to a “family office-style offering” before they would normally qualify."}],[{"start":196.04,"text":"Compared with traditional family office clients, however, advisers said the new AI wealthy were asking for fewer add-on lifestyle services."}],[{"start":203.72,"text":"“We’re not yet seeing that bleed into concierge services, bill-pay, private aviation, dog-walking,” said Choreo’s Van de Loo. “I think that speaks to the generation we’re serving and the way that these investors are wired.”"}],[{"start":220.72,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1786599040_7886.mp3"}