What Happened to E*TRADE from Morgan Stanley?
E*TRADE, a pioneer in online brokerage, was acquired by Morgan Stanley in an all-stock transaction valued at approximately $13 billion, which closed in October 2020. It now operates as a subsidiary, 'E*TRADE from Morgan Stanley,' integrating its digital trading and banking services with Morgan Stanley's broader wealth management offerings. The platform continues to evolve, recently adding cryptocurrency spot trading and fractional shares in 2026.
Quick Answer
E*TRADE was acquired by Morgan Stanley in October 2020 for approximately $13 billion, becoming a key part of Morgan Stanley's wealth management division. It continues to operate under the E*TRADE brand, offering its established online brokerage and banking services, now enhanced with Morgan Stanley's resources. Recent developments in 2026 include the rollout of direct cryptocurrency spot trading for Bitcoin, Ethereum, and Solana, as well as the introduction of fractional share investing, expanding its offerings for both active and new investors.
📊Key Facts
📅Complete Timeline14 events
Founding of TradePlus
Physicist William A. Porter and Bernard A. Newcomb founded TradePlus in Palo Alto, California, with $15,000 in capital, laying the groundwork for electronic trading.
E*TRADE Founded
Porter and Newcomb founded E*TRADE, making electronic trading available to individual investors, a pioneering move in the financial industry.
Initial Public Offering (IPO)
E*TRADE Financial Corporation became a public company, selling 5,665,000 shares at $10.50 per share on the NASDAQ exchange under the ticker 'ETFC'.
Acquisition of Telebanc Financial Corp. and Launch of E*TRADE Bank
E*TRADE acquired Telebanc Financial Corp., the leading internet bank, and subsequently launched E*TRADE Bank in April 2000, expanding into digital banking services.
Introduces Commission-Free Trading
E*TRADE eliminated commissions on U.S.-listed stocks, exchange-traded funds (ETFs), and options, a move that reshaped the online brokerage landscape.
Morgan Stanley Announces Acquisition of E*TRADE
Morgan Stanley announced its definitive agreement to acquire E*TRADE in an all-stock transaction valued at approximately $13 billion, marking a significant consolidation in the industry.
Morgan Stanley Completes E*TRADE Acquisition
The acquisition officially closed, with E*TRADE becoming a subsidiary of Morgan Stanley, operating as 'E*TRADE from Morgan Stanley'.
Brokerage Account Migration Completed
The phased migration of E*TRADE brokerage accounts to Morgan Stanley systems was completed, integrating the platforms further.
Launches Zero-Expense-Ratio Index Funds
E*TRADE announced five proprietary zero-expense-ratio index funds, exclusive to its platform, enhancing its low-cost investment options.
Power E*TRADE Pro Desktop Platform Launched
E*TRADE launched Power E*TRADE Pro, a downloadable desktop platform designed for advanced traders, offering extensive customization and tools.
Morgan Stanley Confirms E*TRADE Crypto Trading Plans
Morgan Stanley officially confirmed plans to introduce cryptocurrency trading for retail customers on its E*TRADE platform in the first half of 2026.
E*TRADE Rumored to Lead SpaceX IPO Retail Slice
E*TRADE was rumored to be in a strong position to lead the retail portion of the upcoming SpaceX IPO, indicating its growing role in major market events.
Rollout of Crypto Spot Trading
E*TRADE from Morgan Stanley completed the rollout of spot trading in digital assets, allowing eligible clients to buy, sell, and hold Bitcoin, Ethereum, and Solana directly on its platform.
Fractional Share Investing Introduced
E*TRADE from Morgan Stanley introduced fractional share investing, further broadening its appeal to a wider range of investors, including beginners.
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🔍Deep Dive Analysis
ETRADE, founded in 1982 by William A. Porter and Bernard A. Newcomb, revolutionized the financial industry by making electronic trading accessible to individual investors in 1992. After going public in 1996, it became a prominent player during the dot-com bubble, known for its online trading platform and low-fee structure. The company expanded its services over the years, including online banking with the launch of ETRADE Bank in 2000.
A significant turning point for ETRADE came in February 2020 when Morgan Stanley announced its acquisition in an all-stock transaction valued at approximately $13 billion. This was the largest U.S. bank acquisition since the 2008 financial crisis. The rationale behind the acquisition was Morgan Stanley's strategic pivot towards a more balance sheet-light business model, emphasizing durable revenue sources from wealth management. ETRADE brought over 5.2 million client accounts and $360 billion in retail client assets, along with a strong direct-to-consumer digital channel and a substantial deposit base, which provided significant funding benefits for Morgan Stanley's lending business.
The deal officially closed on October 2, 2020, following Federal Reserve approval. Post-acquisition, ETRADE retained its brand, operating as 'ETRADE from Morgan Stanley,' with its CEO, Michael Pizzi, joining Morgan Stanley's leadership. The integration process involved migrating ETRADE brokerage accounts to Morgan Stanley systems in phases, which was largely completed by September 2023. Despite the integration, ETRADE continues to offer commission-free trading on U.S.-listed stocks, ETFs, and options, a policy adopted in October 2019.
In the years following the acquisition, ETRADE has continued to enhance its offerings. In December 2024, it introduced five proprietary zero-expense-ratio index funds. The platform also saw the launch of the advanced downloadable desktop platform, Power ETRADE Pro, in July 2025, catering to active traders. A major development in 2026 was the full rollout of cryptocurrency spot trading in July, allowing eligible clients to buy, sell, and hold Bitcoin, Ethereum, and Solana directly on the platform in partnership with Zerohash. Additionally, ETRADE introduced fractional share investing in 2026, making it more accessible for beginners.
As of August 2026, ETRADE from Morgan Stanley remains a robust and award-winning platform. Its Max-Rate Checking Account was recognized as the 'Best Checking Account of 2026' by U.S. News and World Report for the second consecutive year, and Power ETRADE Web was named the '#1 Web Trading Platform' by StockBrokers.com for the 14th year in a row. The platform continues to be a crucial component of Morgan Stanley's wealth management strategy, serving a broad spectrum of investors from self-directed traders to those seeking comprehensive financial advice. Morgan Stanley's IRA assets under management, significantly bolstered by ETRADE, surpassed $1 trillion in March 2026.
What If...?
Explore alternate histories. What if E*TRADE from Morgan Stanley made different choices?