E*TRADE from Morgan Stanley
This agreement grants Morgan Stanley broad security interests in your accounts and assets, allows them to liquidate your holdings without notice to cover debts, and includes forced arbitration. They can modify fees and terms with minimal notice, and your liability for unauthorized transactions varies significantly based on how quickly you report issues.
The Bottom Line
This agreement grants Morgan Stanley broad security interests in your accounts and assets, allows them to liquidate your holdings without notice to cover debts, and includes forced arbitration. They can modify fees and terms with minimal notice, and your liability for unauthorized transactions varies significantly based on how quickly you report issues.
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Notable Clauses
“To the extent permitted by Applicable Law, you understand and agree that Morgan Stanley may at any time and without prior notice to you use, liquidate, and/or transfer any or all Collateral to satisfy any Obligations to Morgan Stanley, however such Obligations may have arisen.”
“you grant Morgan Stanley a first-priority lien on, continuing security interest in, and right of setoff to (a) all Collateral that is held, carried, or maintained now or in the future for any purpose in or through any of your accounts, whether owned individually, jointly, or in the name of another p...”
“We may, at our discretion, modify the Fee Schedule at any time, with or without notice, and modifications are effective as of the designated effective date.”
“If you have a Debit Balance in your Self-Directed Account and you own an interest in any other account (including accounts with any Morgan Stanley affiliate), you understand and agree that Morgan Stanley may, to the extent permitted by Applicable Law, effect a transfer or demand a distribution from ...”
“Unless otherwise required by Applicable Law, regulation, or rule and except as set forth in this Self-Directed Account Agreement and/or in other disclosures provided to you, you agree that neither we nor any other entity performing services in connection with this Self-Directed Account Agreement wil...”
“We may decline to offer you any services or cancel existing services available under this Self-Directed Account Agreement at our discretion without notice to you consistent with the requirements of Applicable Law, regulation, or rule or other agreements applicable to your Self-Directed Account.”
“You understand and agree that if someone used your debit card, PIN, or password without your permission and you inform us within two Business Days, you can lose no more than $50. You understand and agree that if you do not tell us within two Business Days after you have learned of the loss or theft ...”
“You acknowledge that bank deposits purchased through Morgan Stanley at the Federal Deposit Insurance Corporation (" FDIC ") member institutions (including, for example, savings deposits, Bank Deposit Program (" BDP ," as defined in the BDP Disclosure Statement) deposits, certificates of deposit, and...”
“You further understand that all other investment products are subject to investment risks, including the possible loss of the entire principal amount invested.”
Protect Yourself
ACTIONABLESettings and actions you can take to limit your exposure
Monitor Account Balances Daily
Check your account balance daily to spot unauthorized liquidations or transfers early, giving you more time to respond and limit losses
- Log into etrade.com daily
- Review account summary for unexpected changes
- Check recent transactions for unauthorized activity
- Set up account alerts for transactions over a certain amount
Enable Account Security Alerts
Set up notifications for logins, trades, and account changes to catch unauthorized activity quickly
- Go to Account Settings → Security Center
- Enable login alerts via email and text
- Set trade confirmation alerts
- Turn on large transaction notifications
Separate High-Value Assets
Keep large investments in accounts with different institutions to limit Morgan Stanley's cross-account collection rights
- Open accounts at different brokerages for major holdings
- Avoid linking external Morgan Stanley affiliate accounts
- Keep emergency funds at a different bank
- Consider using different custodians for retirement accounts
Document All Communications
Keep records of disputes and communications since they can liquidate without notice and limit liability
- Screenshot account statements monthly
- Save email confirmations of all requests
- Follow up verbal conversations with written summaries
- Keep records of all fee schedules and changes
Review Fee Schedules Regularly
Check for fee changes since they can modify fees without notice
- Visit etrade.com/pricing monthly
- Compare fees to previous statements
- Set calendar reminders to check fee schedules
- Look for fee change notifications in account messages
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Disclaimer:The clauses shown above are excerpts from publicly available Terms of Service documents. Ratings and severity levels reflect community and AI assessment, not legal advice, factual claims, or determinations about a company's legality or intent. Clauses marked “VERIFIED” have been confirmed as exact quotes from the source document. Clauses marked “AI-extracted” were identified by AI and may contain errors. Always verify against the original TOS.
Get notified when E*TRADE from Morgan Stanley updates their TOS
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