Morgan Stanley announced it’s buying online brokerage E-Trade

Yesterday, Morgan Stanley announced it’s buying online brokerage E-Trade in a $13 billion, all-stock deal that’s Wall Street’s biggest takeover since the 2008 financial crisis.  The prize: E-Trade’s 5.2 million customers and $360 billion in assets, including $56 billion in deposits it can use as funding. And top billing in the Brew, obviously.  Conditions were ripe  Now that Morgan Stanley has overcome Heartbreak Hill on its recession recovery marathon, it's looking for steadier revenue streams than its investment banking and trading divisions can offer. CEO James Gorman has been stalking E-Trade for years—first in 2002 at Merrill Lynch, then in 2007 at Morgan Stanley.  Talks rekindled in December as E-Trade pondered its fate following news that brokerage rivals Charles Schwab and TD Ameritrade were combining.  All three brokerages were hurting from falling commissions and low interest rates. Zoom out: Noticing more banking deals? Wall Street is taking advantage of the Trump administration’s friendlier attitude to financial takeovers. From Wall St. to Main St.  Last year, wealth management accounted for more than half of Morgan Stanley’s record $41 billion in revenue. Its 15k-strong human advisors traditionally focused on the 0.1%, but last year, MS opened up an online tool for customers who can file on TurboTax.  The E-Trade acquisition will expand that division, and execs said it would give Morgan Stanley the ability to offer more regular-guy services like checking and savings.  Gorman also hopes to leverage E-Trade to expand wealth management services to international customers. And don’t forget about E-Trade’s primary engine: managing compensation-related stock. The combined companies will control $580+ billion in employee shares across 4,000 corporate customers.  Big picture: “All of Wall Street is on the hunt for more reliable sources of revenue after postcrisis regulations and a long period of eerie calm in the markets crimped trading,” writes the WSJ. JPMorgan and Bank of America are doubling down on payments, while Goldman Sachs is leaning into retail banking.