Axos Financial in San Diego has agreed to buy E-Trade Advisor Services from Morgan Stanley.
The parent of the $14.4 billion-asset Axos Bank said in a press release Tuesday that will pay $55 million in cash for the registered investment adviser custody business. The deal is expected to close in the third quarter.
Morgan Stanley bought E-Trade Financial last year.
“The addition of approximately 200 RIA custody relationships with $23 billion of combined assets under custody significantly accelerates our time-to-scale in this business,” Greg Garrabrants, Axos Financial’s president and CEO, said in the release.
“We intend to leverage EAS’ turnkey technology platform and Axos Clearing’s capabilities to expand the service offerings to independent registered investment advisers and turnkey asset management program managers,” Garrabrants added.
E-Trade Advisor Services also has $1.2 billion of client cash deposits.
Axos Financial said the deal should be 5% accretive to its fiscal 2023 earnings per share. It should take about three years for Axos Financial to earn back any dilution to its tangible book value.
