Understanding YourBrokerage and Investment
Advisory Relationships
JUNE 2024

Depending on your needs and your investment objectives, Morgan Stanley may
assist you with brokerage services, investment advisory services or both. There areimportant differences highlighted below between brokerage and advisory accounts,
including their costs, the services we provide and the rules that govern them. You
should carefully consider these differences when deciding which type, or combinationof types, of services and accounts are right for you.
Morgan Stanley is registered as both a broker-dealer and as an investment adviser
under federal and state securities laws, and we provide services in both capacities.
In accordance with the rules of the Financial Industry Regulatory Authority (FINRA),
whether acting in a brokerage or advisory capacity, Morgan Stanley observes highstandards of commercial honor and just and equitable principles of trade.
What are Brokerage Accountsand Services?
When we act as a broker-dealer inconnection with your brokerage account,
we will facilitate the execution oftransactions based on your instructions.
In addition, when we act as a broker, we
also offer investor education, research,financial tools and personalized
information about financial products
and services, including recommendations
about whether to buy, sell or holdsecurities. We do not charge a separate
fee for these services because these
services are part of, and incidental to, ourbrokerage services.

When we act as your broker-dealer, we
do not have discretion to buy and sell
securities for you (except in limited
circumstances). Therefore, you will
provide approval for each trade before itis executed and you will make individualbuy, sell and hold decisions rather than us
making those decisions.
What Is Morgan Stanley’s Role When
Handling A Brokerage Account?
When recommending securities
transactions or investment strategies
involving securities while providing
brokerage services to you, we must act
in your best interest,1 which requiresthat we do not put our interest aheadof yours. However, we generally do nothave a fiduciary obligation to you nor dohave an investment advisory relationshipwith you. Please note the “best interest”
obligation described herein applies
only to Retail Customers, as definedin regulations issued, particularly,“Regulation Best Interest” by the SEC.
A Retail Customer is defined as a naturalperson, or the legal representative ofsuch natural person, who (A) receivesa recommendation of any securities
transaction or investment strategy
involving securities from a broker,
dealer or a natural person who is an

UNDERSTANDING YOUR BROKERAGE AND INVESTMENT ADVISORY RELATIONSHIPS

associated person of a broker or dealer,
and regulations, the Employee Retirement
Income Security Act of 1974, asamended, or “ERISA”, and any applicableprofessional conduct standards.
What are Investment Advisory
Accounts and Services?
In addition to brokerage services offered
to clients, Morgan Stanley offers avariety of investment advisory programs
and services, including comprehensive
financial planning, non-discretionary anddiscretionary portfolio management, andadvice on the selection of professional
asset managers and securities.
We must enter into a written agreementwith you that describes our advisory
relationship and our obligations to you
before we can act as your investment
adviser. You also will receive a disclosure
document about our advisory services,
called a Form ADV Brochure, that
describes, among other things, ourbusiness, the services we provide,our advisory fees, our personnel, andpotential conflicts between our interests
and yours. Investment Advisers aregoverned by the Investment Advisers Actof 1940 and applicable state securities
laws. When acting as your investment
adviser, we have a fiduciary relationshipwith you. In addition, for advisory
retirement accounts,2 we act as a fiduciaryunder the Employee Retirement Income
Security Act of 1974 (“ERISA”) and/or under Section 4975 of the Internal
Revenue Code (the “Code”).
What is Your Financial Advisor’s
Role When Handling an Investment
Advisory Account?
Your Financial Advisor’s authority
over the activity in your account will
differ, depending on the nature ofthe investment advisory account youchoose. For example, in our Portfolio

Management program, your Financial
Advisor will have discretionary authority
to execute investment decisions on
your behalf. In our Consulting Group
Advisor program, your Financial
Advisor will work with you to makeinvestment recommendations, but you
will maintain discretion over all theinvestment decisions made in youraccount. In other advisory account types,
your Financial Advisor will select orrecommend investment products or thirdparty managers.
How You are Charged for Brokerage
and Investment Advisory Accounts?
BROKERAGE ACCOUNTS

In a brokerage account, you generallycompensate Morgan Stanley and yourFinancial Advisor through a commission
for each equity transaction, a mark-up/
mark-down for bond transactions and asales charge for mutual fund transactions.
Therefore, in a brokerage account yourtotal costs will generally increase or
decrease depending on the frequency oftransactions in the account and the typeof securities you purchase. Additionalcosts will also apply to your account.
INVESTMENT ADVISORY ACCOUNTS

In an investment advisory account, you
generally compensate Morgan Stanley
and our Financial Advisor through anannual fee, payable monthly, in advancebased on the total value of the assets
in your investment advisory accountat the end of the previous month. This
Morgan Stanley Advisory fee (“AdvisoryFee”) typically covers our investment
advisory services, trade execution
through Morgan Stanley, custody of
securities at Morgan Stanley, reporting,and compensation to your Financial
Advisor. Depending upon the investment
advisory program you select, you may
also be charged a professional money
manager’s (“Manager”) fee, as well as
additional fees for platform maintenance.

Morgan Stanley or the Manager
may determine that best execution ismore likely to be achieved by having
an external broker-dealer other thanMorgan Stanley execute the transaction,even if such broker-dealer requires
payment of a fee or other charges. Thisapplies to certain transactions, including,without limitation, block trades inwhich Morgan Stanley or the Manager
aggregates securities purchases or sales forthe account with those of one or more of
its other clients. In such instances, youraccount will be charged a commission orcommission equivalent. These costs arein addition to the Advisory Fee you pay
to Morgan Stanley and will be includedin the net price of the security but will
not be reflected as a separate charge on
your trade confirmations or accountstatements.
Certain Managers have historicallydirected most, if not all, of theirtrades to external broker-dealers. The
information provided by Managers
concerning trade execution away from
Morgan Stanley is summarized at:
http://www.morganstanley.com/wealth/investmentsolutions/pdfs/adv/sotresponse.
pdf. For more information on trading andcosts, please refer to the ADV Brochurefor your applicable program, available at
http://www.morganstanley.com/ADV, orby contacting your Financial Advisor orPrivate Wealth Advisor.
In evaluating which broker or dealer
will provide the best execution,
Morgan Stanley, or the Manager, in its
sole discretion and in accordance withapplicable law (including the obligationto seek best execution), will consider
the full range and quality of a broker’s
or dealer’s services, which may include,
among other things, the value of research
provided, as well as, execution capability,commission rate, financial responsibility
and responsiveness. These entities

1
A recommendation meeting the “Best Interest” standard is a recommendation that reflects the care, skill, prudence and diligence under the circumstancesthen prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like characterand with like aims, based on your investment objectives, risk tolerance, financial circumstances and needs, without placing the financial or other interestsof us or the Financial Advisor or any Affiliate, Related Entity, or other party ahead of your interest.
2Retirement accounts include Individual Retirement Account (“IRA”), Roth IRA, Health Savings Account, Coverdell Education Savings Account, Archer
Medical Savings Account, a Plan covered by Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or a plan describedin section 4975(e)(1)(A) of the Internal Revenue Code (“Code”).

2

MORGAN STANLEY|2024

UNDERSTANDING YOUR BROKERAGE AND INVESTMENT ADVISORY RELATIONSHIPS

may select broker-dealers that provide
Morgan Stanley and/or the Manager
research or other transaction-related
services. This may result in a charge toyou for broker-dealer commissions for
effecting transactions that ends up being
more expensive than the commission that
other broker- dealers may have charged.
Research and other services may be used
for Morgan Stanley’s or for the Manager’s
own or other client accounts to the extent
permitted by law.
Our services and responsibilities, as wellas, the applicable fees charge to youraccount, are described in detail in theinvestment advisory agreement that
we enter into with you, the playback
letter provided to you after accountopening, and in the Form ADVBrochure applicable to the program you
have selected.
BOTH BROKERAGE AND
ADVISORY ACCOUNTS

In both brokerage and investment
advisory accounts which include products
such as mutual funds or exchange
traded funds, additional expenses will
be charged to you, including investment

management fees of the fund, as well asoperating expenses that are reflected in
the funds’ share price. These expenses arenot included in Morgan Stanley’s fees.
Additional fees and expenses that are notoutlined above, may apply as described in
our agreements with you.
When We Act as Both YourBroker‑Dealer and Your
Investment Adviser
We may act as investment adviser and as
broker-dealer to you at the same time.
This does not mean that our brokeragerelationships are advisory ones. For
example, you may maintain multiple
accounts (some brokerage accounts andsome investment advisory accounts)
with Morgan Stanley at the sametime. Although we may consider yourbrokerage account assets in preparing
guidelines or determining appropriate
investments for your investment advisoryaccounts, our brokerage relationship only
covers your brokerage assets.

For More Information
We encourage you to carefully consider
the differences between brokerage andinvestment advisory services, particularly
in terms of our obligations to you, theservices we provide and the costs ofthose services. You should consider yourexisting and anticipated level of trading
activity, the types of investments you
wish to hold and the level of discretion
you wish to retain over security selection
when determining which account type isright for you. The Form ADV Brochures
for each of our programs provides
additional information, including
disclosure of conflicts, and are available
at: www.morganstanely.com/adv.
If you have additional questions,please contact a member of yourMorgan Stanley team for more
information.

When Morgan Stanley Smith Barney LLC, its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors (collectively, “Morgan Stanley”)
provide “investment advice” regarding a retirement or welfare benefit plan account, an individual retirement account or a Coverdell education savings account(“Retirement Account”), Morgan Stanley is a “fiduciary” as those terms are defined under the Employee Retirement Income Security Act of 1974, as amended(“ERISA”), and/or the Internal Revenue Code of 1986 (the “Code”), as applicable. When Morgan Stanley provides investment education, takes orders on anunsolicited basis or otherwise does not provide “investment advice”, Morgan Stanley will not be considered a “fiduciary” under ERISA and/or the Code. Formore information regarding Morgan Stanley’s role with respect to a Retirement Account, please visit www.morganstanley.com/disclosures/dol. Tax laws arecomplex and subject to change. Morgan Stanley does not provide tax or legal advice. Individuals are encouraged to consult their tax and legal advisors (a) before
establishing a Retirement Account, and (b) regarding any potential tax, ERISA and related consequences of any investments or other transactions made withrespect to a Retirement Account.
© 2024 Morgan Stanley Smith Barney LLC. Member SIPC.

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