(HedgeCo.Net) Morgan Stanley’s decision to cut private-share trading fees in half on EquityZen—reducing buy-side and sell-side transaction fees to 2.5% from 5% for most trades, effective immediately—looks like a straightforward pricing move. It isn’t. It’s a signal that the bank believes the private-company secondary market is shifting from an occasional liquidity solution into a scalable, strategic pillar of modern wealth management.
At stake is not only market share among accredited investors seeking access to high-profile private companies, but the broader question of who “owns” the interface between private-market opportunities and mass affluent capital. When a global wealth-management giant decides to compress economics on a newly acquired platform, it typically means one thing: it expects volume, cross-sell, and relationship value to make up what it gives away in margin.
In other words, Morgan Stanley is treating private shares less like a niche transaction and more like a client acquisition and retention engine—one that could become increasingly important as companies stay private longer, and as more investors demand “pre-IPO” exposure without the friction of bespoke private-fund commitments.
The headline move: fees down, access up
The mechanics are simple. Morgan Stanley’s wealth management division announced that EquityZen—its newly acquired private shares marketplace—has lowered fees for both investors purchasing private-company shares and shareholders selling them. For most transactions, the fee now stands at 2.5%, down from 5%.
The implications are not simple.
Private-share marketplaces have historically carried higher friction costs than public markets: spreads can be wide, transactions can be complex, and liquidity is intermittent. A 5% fee on each side of a trade (even if not always applied symmetrically in practice across platforms and deal types) can materially impact net returns. By halving that burden, Morgan Stanley is directly addressing one of the main objections investors raise when evaluating private shares: “even if I’m right on the company, will fees and liquidity risk eat the upside?”
The bank’s leadership framed the fee reduction as part of a broader push to reduce barriers and broaden access. Barron’s reporting notes that the change applies to transactions conducted via EquityZen, and that participation is limited to accredited investors—a key reminder that this is still an “access expansion,” not mass retail democratization.
Why Morgan Stanley is doing this now
Timing matters. Morgan Stanley finalized its acquisition of EquityZen in January 2026, and the fee cut landed within weeks—suggesting the firm moved quickly once it could apply its scale, distribution reach, and balance-sheet confidence to the platform.
This is best understood as part of a long-running transformation of wealth management. Over the last decade, large wirehouses have competed to become “financial platforms” rather than brokerage firms—winning not by charging the most per trade, but by expanding wallet share across advice, lending, banking, investments, and alternative products. Private shares fit neatly into that strategy because they sit at the intersection of aspiration and scarcity: clients want access to companies they read about, talk about, or work for, but can’t buy in public markets.
Morgan Stanley’s own messaging emphasizes “broadening private markets access,” but the strategic logic goes deeper: private shares are a way to keep clients engaged, differentiate the advisor proposition, and build a pipeline to future wealth events (liquidity moments, IPOs, acquisitions, founder exits).
A changing private-market reality: companies stay private longer
The private share market’s growth is not accidental. A structural shift has been underway for years: many of the world’s most valuable technology and platform companies are staying private longer, raising large late-stage rounds and building internal liquidity programs rather than going public early. The Financial Times has framed Morgan Stanley’s EquityZen deal as a bet on that trend—highlighting that high-growth companies are delaying IPOs and reaching valuations once typical of public markets.
That matters for wealth management because IPOs used to be the primary “moment” when affluent investors gained access to fast-growing firms. As IPO timelines stretch, the secondary market becomes the bridge—an imperfect one, but increasingly central.
In that context, Morgan Stanley’s fee cut is not merely competitive pricing. It is an attempt to accelerate a broader transition: from private shares as a bespoke, high-friction product to private shares as a repeatable allocation sleeveinside a managed wealth relationship.
EquityZen’s position in the ecosystem
EquityZen isn’t an unknown startup. Reuters and the FT both describe it as a significant marketplace with a large user base and a long operating history, facilitating transactions across hundreds of private companies. Reuters reported at the time of the acquisition announcement that EquityZen had over 800,000 registered users and had facilitated tens of thousands of transactions across 450+ companies.
That scale matters for two reasons:
- Inventory and breadth: a marketplace with exposure to hundreds of issuers can better match buyers and sellers and create repeat activity.
- Data and pricing: more transactions create more signal on where private shares clear—important for valuation confidence and for advisors guiding clients.
Morgan Stanley is effectively buying a running system and then using price as an accelerant—pushing the platform harder into the mainstream of its wealth-management offering.
Fee compression as strategy: the “platform play”
When banks cut fees, the first instinct is to treat it as an aggressor move against competitors. That’s true, but incomplete. In wealth management, some products are not designed to maximize transaction margin. They are designed to:
- deepen client engagement
- create advisor “stickiness”
- generate cross-sell opportunities
- reinforce the firm’s brand as the gateway to scarce opportunities
Private shares do all four—especially in a world where alternative investments and private-market narratives play an outsized role in client conversations.
Bloomberg’s coverage emphasized that the move “undercuts competitors” and positions the firm to expand in a growing market for private-company share trading. This is classic platform behavior: cut the toll to increase traffic, then monetize the relationship.
What changes for investors
Lower fees meaningfully change the math of private-share participation.
Private share investing already carries several embedded costs and risks:
- illiquidity (you may not be able to sell when you want)
- issuer transfer restrictions
- limited financial disclosure relative to public markets
- valuation uncertainty
- concentration risk (many investors target a small number of “hot” names)
High transaction fees have historically amplified those challenges by front-loading a performance hurdle. Cutting fees from 5% to 2.5% reduces that hurdle and can make smaller allocations more practical—particularly for wealthy investors who want diversified exposure across multiple private names rather than a single concentrated bet.
But the fee cut does not remove the core truth: private shares are not public stocks. Investors still need to approach them with underwriting discipline, time-horizon clarity, and an understanding that liquidity is episodic.
What changes for sellers: employees, early investors, and founders
It’s easy to focus on buy-side access, but Morgan Stanley also cut sell-side fees.
That matters because much of the private share market exists to solve a problem for insiders: employees and early investors often hold meaningful paper wealth but have limited ways to realize it before an IPO or acquisition. Platforms like EquityZen can provide partial liquidity—within issuer constraints—helping individuals diversify or fund life events without waiting for a public listing.
Lower sell-side fees can improve net proceeds, which may encourage participation and increase supply—an important dynamic in a marketplace where supply constraints often shape pricing and availability.
The role of issuer control—and why it’s a feature, not a bug
A persistent misunderstanding about private-share trading is that it’s simply a “secondary exchange” for startups. It isn’t. Many issuers maintain control over transfer permissions and often seek to manage who holds their stock. Barron’s notes that EquityZen works within issuer-controlled processes around share movement and pricing.
For investors, this is a double-edged sword:
- It may reduce the risk of chaotic, uncontrolled trading.
- It can also limit liquidity and complicate transaction execution.
Morgan Stanley’s bet appears to be that by scaling within issuer-friendly frameworks—and by leveraging its institutional relationships—it can grow volume while maintaining the governance standards that private issuers demand.
Competitive pressure: a market moving toward “wirehouse-scale distribution”
There are other players in private shares and secondaries—dedicated marketplaces, broker intermediaries, and private fund structures. What Morgan Stanley brings is not only a platform but distribution muscle: a large advisor force, a deep client base, and a brand that affluent investors associate with institutional access.
This is why a price cut is powerful. It signals confidence that the firm can win on:
- trust
- compliance infrastructure
- advisor integration
- product packaging
- and the ability to keep clients “inside the tent” for adjacent services
AdvisorHub highlighted the fee reduction and quoted Jed Finn, head of Morgan Stanley Wealth Management, suggesting the firm would go as low as needed to deliver strong outcomes for clients in the marketplace—language consistent with a competitive push rather than a one-off discount.
The bigger story: private markets becoming “retail adjacent”
This fee cut sits inside a broader “retail adjacency” trend in alternatives. Not true retail—because participation remains gated to accredited investors—but the movement of private-market tools and narratives into mainstream wealth channels.
This trend has several drivers:
- demand for diversification beyond public equities and bonds
- higher awareness of private-market winners
- dissatisfaction with the IPO pipeline
- and a desire to invest earlier in perceived growth curves
Morgan Stanley is leaning into this shift: acquire platform infrastructure (EquityZen), reduce friction (fees), and bring private shares closer to the advisor-led portfolio construction process.
The risk, of course, is suitability and expectation-setting. Private shares can be compelling, but they are not “the next ETF.” Advisors and platforms must manage client psychology around valuation marks, liquidity windows, and the reality that some private names never achieve the outcomes investors expect.
What allocators and advisors should watch next
Morgan Stanley’s fee cut is a catalyst—but the real impact will depend on execution. Several indicators will show whether this becomes a true inflection point:
1) Volume growth and breadth of participation
Does lower pricing lead to more transactions, more repeat clients, and more diversified buying patterns?
2) Improvement in liquidity experience
Do investors and sellers experience smoother execution, clearer timelines, and better transparency around transfer constraints?
3) Platform integration into managed portfolios
Does private-share exposure become a recurring sleeve—small but consistent—inside wealth allocations?
4) Competitive response
Do other platforms match pricing? Or do they differentiate via issuer access, specialized research, or structured vehicles?
5) Regulatory and compliance posture
As private shares become more visible in wealth channels, scrutiny around marketing language, suitability practices, and disclosure norms may rise.
A measured conclusion: cheaper doesn’t mean easy—but it may mean bigger
Morgan Stanley’s move to cut private-share trading fees to 2.5% from 5% on EquityZen is, on the surface, a straightforward pricing update. In reality, it’s a declaration of intent: the bank is positioning private-company share access as a core element of its wealth-management future—one that can deepen relationships, differentiate advisory value, and keep clients invested in the “private economy” even as public listings remain scarce.
Lower fees will not eliminate the fundamental complexities of private shares: illiquidity, transfer restrictions, limited disclosure, and valuation uncertainty remain defining features of the asset class. But by reducing friction, Morgan Stanley is making it more feasible for accredited investors to treat private shares not as a one-time speculative punt, but as an intentional, repeatable allocation.
That’s what makes the story worth watching. A fee cut is rarely just a fee cut—especially when it comes from a firm with the scale to turn a niche into a category.