- E-Trade is staffing up a team that caters to outside executives who need assistance managing their equity-compensation plans after seeing a pickup in client inquiries in recent months.
- The executive-services team is looking to hire for the team’s relationship-management positions, which are roles working with clients directly on matters involving their plans.
- His team is catering to these sophisticated clients round-the-clock, which underlines the heightened demand the industry is seeing during the pandemic.
- E-Trade’s stock-plan business line is one reason the brokerage made for an attractive target for Morgan Stanley, which is set to close on the deal by year-end.
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For decades, investors have associated the online brokerage and investment firm E-Trade with do-it-yourself trading and, for a time, its talking-baby ads. Less known to Main Street customers is its corporate stock-plan administration business, which manages other companies’ employees’ equity-compensation plans.
It’s not as flashy as other areas, like trading the next hot stock or using automated investing tools.
But analysts deemed that business line a principal reason that the brokerage made for an attractive target for Morgan Stanley, which was already trying to solidify a foothold in the corporate-stock-plan space. The bank is set to close on that deal, which was worth about $13 billion when it was announced in February before the market’s downturn, by year-end.
During the coronavirus pandemic and the volatility and economic deterioration that it’s spurred in the US since early 2020, one team within E-Trade’s stock plan administration division is working round-the-clock with its customers.
“Phone volumes are up, email, chat; that’s all up quite a bit,” Kevin Meyersburg, the head of the firm’s executive-services unit, which caters to executives using its equity-compensation program, said in a recent phone interview.
“We need to be here for not only our stock plan participants, but our clients overall. We need to be here to take their call and certainly to guide them in a time that no one’s ever seen,” Meyersburg, an E-Trade veteran, said.
The executive-services team is looking to hire for the team’s relationship-management positions, which are roles working with clients directly on matters involving their plans. The company declined to comment on how many people the unit is looking to take on.
About 200 people work in the wider division, and roughly 99% of the company’s employees are working in remote settings as a result of the pandemic.
Executive services serves C-suite- and director-level leaders at about 20% of companies within the S&P 500, and about half of publicly traded technology and healthcare companies in the US.
Through April, E-Trade reported about 1.95 million accounts within corporate services, under which executive services and the rest of the corporate-stock-plan administration business operates.
Options trading Managing during the volatility
Meyersburg’s team is catering to these sophisticated clients round-the-clock, which underlines the heightened demand the industry is seeing during the pandemic. “The times of these conversations have gone from your typical 9 to 6 or 8 to 6 to — it could be 9 at night,” he said.
During the first quarter — encompassing the worst of the stock market’s downturn, when the S&P 500 dropped to the year’s lowest level in mid-March and a common measure of equity market volatility spiked — the number of E-Trade customer inquiries were more than 50% higher than the average volume reported a year prior.
During the first quarter, E-Trade’s corporate-services arm said it implemented more than $4 billion in new clients’ employee stock plans, with more than $20 billion for 12 months through that period.
Financial advisers and other professionals, like the relationship managers in E-Trade’s unit, have scrambled during the pandemic to hand-hold (from a distance) and prove their worth to clients at a time when low-cost automated options are putting the industry under pressure.
More and more, clients are realizing they’re not fully equipped with their financial plans, Meyersburg said, invoking the pending combination with Morgan Stanley. Some of the bank’s services that come with a full-fledged wealth offering, like trust and estate, charitable giving, and family-office management, aren’t on E-Trade’s menu.
“We may not necessarily have the solution to what they’re asking for. We have a lot of it, but there are the things that Morgan Stanley offers that we’re very, very excited to be able to plug into,” he said.
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For the executives Meyersburg caters to, conversations around their financial situations have extended even to how E-Trade is handling itself during the pandemic and how the political environment is shaping up during an election year.
“That’s different,” he said. “You know, we’re typically having more of a financial type of conversation. It’s pivoted toward family and the weight of everything that’s going on as far as being a leader: What’s going to happen next year?”
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