The Australian financial advisory landscape was significantly impacted by the recent departure of two leading wealth advisers, Garth Hu and Cathy Ding, from Morgan Stanley. After notable careers managing approximately $4 billion in client assets, the pair announced their exit to establish their own company, GloryHouse. Their decision has raised eyebrows, particularly due to the circumstances surrounding their departure, which included an internal investigation into alleged compliance breaches.
In the latter half of 2023, Morgan Stanley conducted a review of Hu and Ding’s business operations, reportedly identifying serious concerns regarding their compliance with various regulatory requirements. Sources familiar with the investigation, who spoke on condition of anonymity, indicated that issues arose from documentation submitted to the federal government. Consequently, Morgan Stanley notified the Australian Securities and Investments Commission (ASIC) of its findings.
Both advisers were placed on administrative leave as the investigation unfolded. After being informed of the outcomes, Hu and Ding opted to resign rather than face termination. In response to inquiries regarding the investigation, 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, emphasizing that her departure was solely to work with Hu in launching their new firm.
The exits of Hu and Ding have raised questions within the wealth management sector, particularly since Hu has consistently ranked as one of Australia’s top financial advisers on the annual Barron’s list. He has held the top position since 2020, while Ding has been recognized as one of the highest-ranked female advisers. Their extensive client base included individuals involved in the significant investor visa program, which was discontinued in 2024 due to its failure to meet government objectives.
GloryHouse was officially registered on September 4, 2024, indicating that the new venture was in the works prior to their departure from Morgan Stanley. The firm aims to cater to high-net-worth clients, particularly targeting wealthy Chinese immigrants. Their marketing materials highlight services related to initial public offerings, private credit investments, and bespoke financial planning.
Morgan Stanley’s wealth management division continues to oversee over $40 billion in client assets, but the loss of Hu and Ding is a notable setback. The firm has since shifted its focus to ultra-high-net-worth clients, believing this segment will benefit most from its global resources. The departures followed a broader trend in the financial advice sector, which has witnessed significant ownership changes and a growing interest from offshore players looking to capitalize on Australia’s increasing number of wealthy investors.
Research by LGT Wealth Management indicates a substantial rise in the ultra-wealthy demographic within Australia, with 11,000 individuals now classified as possessing between $5 million and $10 million in investable assets, and an additional 7,000 classified as ultra-high-net-worth, having over $10 million.
As Morgan Stanley adapts to these changes, it remains to be seen how the landscape will evolve in light of the increasing competition and the ongoing shifts in client expectations within the wealth management sector.
