The Australian wealth management sector experienced a significant shake-up with the departure of two leading financial advisers, Garth Hu and Cathy Ding, from Morgan Stanley. Both advisers, who managed approximately $4 billion in private client assets, announced their exit to establish their own firm, GloryHouse. Their decision drew considerable attention due to their prominent status and high-profile client lists across Australia and Asia.
The transition was not without controversy. Sources familiar with the situation revealed that prior to their departure, Morgan Stanley conducted an internal investigation into Hu and Ding’s business practices. This inquiry reportedly uncovered what the firm characterized as serious compliance breaches. According to four individuals who requested anonymity due to the sensitive nature of the matter, the investigation focused on documentation submitted to the federal government, including compliance-related materials.
On the heels of these findings, the Australian Securities and Investments Commission (ASIC) was notified of the bank’s concerns. As a result of the investigation, Hu and Ding were placed on administrative leave. They ultimately chose to resign as the firm prepared termination letters, opting not to participate in further discussions regarding the investigation’s conclusions.
In response to inquiries about the circumstances surrounding their exit, Hu stated, “I agreed to part ways with Morgan Stanley in order to establish GloryHouse. I provided notice of my resignation and my decision to leave was not related to compliance.” Ding echoed this sentiment, asserting her departure was solely to collaborate with Hu on the new venture. Neither addressed specifics regarding the investigation.
The Australian Financial Review does not assert that compliance breaches occurred; rather, it confirms that an investigation took place. The establishment of GloryHouse Holdings, GloryHouse Investments, and GloryHouse Wealth Management was registered on September 4, 2024, indicating a swift transition for the duo, who had been fixtures at Morgan Stanley for many years.
The exit of Hu and Ding represents a notable loss for Morgan Stanley, particularly given their role in managing significant assets, including clients participating in the now-defunct significant investor visa program. This initiative allowed wealthy migrants to gain residency by investing $5 million in approved Australian ventures. The program was discontinued in 2024 following a review that found it ineffective in attracting foreign capital and skilled migrants.
The impact of Hu and Ding’s departure was felt throughout the adviser market, coinciding with structural changes at Morgan Stanley following a series of other high-profile exits. In the past six months, the firm has also seen resignations from other advisers, including executive directors Steve Moon and Peter Seldon. The firm is now focusing its wealth management strategy on ultra-high net worth clients, a segment it believes could benefit most from its global resources.
Hu’s absence from the Barron’s list of top financial advisers in 2024 can be attributed to his decision to establish GloryHouse. He had ranked first among Australia’s top advisers since 2020 and had a lengthy career at Morgan Stanley spanning 16 years, preceded by a role at UBS Wealth Management. Ding, who ranked 18th on the same list in 2024, had been with Morgan Stanley for almost nine years, previously working at Deloitte and PwC.
With GloryHouse, Hu and Ding aim to create a boutique advisory firm dedicated to “preserving and growing family legacies across generations.” Their marketing efforts have targeted wealthy Chinese immigrants, offering access to initial public offerings, pre-IPOs, private credit investments, cryptocurrencies, and various concierge services ranging from real estate to luxury travel.
As the landscape of wealth management evolves, Morgan Stanley continues to adapt, now overseeing around $40 billion in client assets with a team of approximately 60 advisers. The recent shift in focus towards ultra-high net worth individuals reflects broader trends in the financial advice sector, where international players increasingly seek to capitalize on Australia’s growing base of affluent investors.
Research from LGT Wealth Management indicates that the number of ultra-wealthy Australians has surged, with an increase of 11,000 individuals holding between $5 million and $10 million in investable assets last year, while those with over $10 million rose by 7,000. This growth presents both challenges and opportunities for firms navigating the competitive landscape of wealth management.
