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Mandell Crawley on the Private Wealth Business (Podcast) · Masters in Business

0:02
Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.
0:07
Speaker 1: This week on the podcast, I have a special guest.
0:10
Speaker 1: His name is Mandel Crowley. He is the head of
0:13
Speaker 1: private wealth management at Morgan Stanley. We have a fascinating
0:17
Speaker 1: conversation not only about wealth management, about working in a
0:22
Speaker 1: giant firm and how one starts as an intern and
0:26
Speaker 1: works their way up to a really important and influential position,
0:31
Speaker 1: but how he as a person of color, deals with
0:34
Speaker 1: the lack of diversity in the industry and what various
0:38
Speaker 1: companies are doing about the lack of people of color,
0:42
Speaker 1: the lack of females in investment management, How this happened
0:46
Speaker 1: and why there are reasons to be hopeful that change
0:50
Speaker 1: has begun not only in a grassroots basis, but in
0:55
Speaker 1: corporate America as well, and that this isn't merely another
1:00
Speaker 1: cycle where people make noise and then it fades. It
1:03
Speaker 1: looks like things are changing and for the better. So
1:06
Speaker 1: if you are at all interested in wealth management, how
1:09
Speaker 1: to attract and recruit top talent, how to build a
1:13
Speaker 1: financial services firm, you will find this conversation to be fascinating. So,
1:17
Speaker 1: with no further ado, my conversation with Morgan Stanley's Mandel Crawley.
1:24
Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.
1:29
Speaker 1: My special guest today is Mandel Crawley. He is the
1:33
Speaker 1: head of Private Wealth Management at Morgan Stanley. Along with
1:36
Speaker 1: wearing a number of other hats uh, he has an
1:39
Speaker 1: MBA from Formham University and has spent his entire career
1:44
Speaker 1: at Morgan Stanley. Mandel Crawley, Welcome to Bloomberg. I appreciate it.
1:49
Speaker 1: It is really good to be here with you. Thanks
1:51
Speaker 1: for having me on my pleasure. So I mentioned you
1:54
Speaker 1: spent your whole career at Morgan. Tell us about how
1:58
Speaker 1: you first got started in the final actual services industry.
2:01
Speaker 1: What did you imagine your career would be like? Yeah,
2:05
Speaker 1: you know, thanks very I have to tell you my past.
2:09
Speaker 1: The finance is unorthodox, to say the least. I started
2:12
Speaker 1: as a high school intern at one of more Elitis
2:17
Speaker 1: predecessor firms at Dean Winter And you know, at the
2:21
Speaker 1: time it was a work study commitment, making five dollars
2:25
Speaker 1: an hour, working about twenty hours a week. I had
2:27
Speaker 1: zero interests in finance. Me frankly, I had every intention
2:32
Speaker 1: at that time of my young life to be an educator.
2:35
Speaker 1: But you know, through this internship, I got exposed to
2:38
Speaker 1: financial services, specifically the cells and trading business, the capital markets.
2:43
Speaker 1: Happened to work with a group of professionals who took
2:48
Speaker 1: a real interest in me. And the rest is, as
2:50
Speaker 1: they say, history. So how long were you an intern
2:54
Speaker 1: four and what eventually led you to working on a
2:57
Speaker 1: barn desk? So the internship was reporting about fifteen folks.
3:02
Speaker 1: It was a muni minicipal bond public finance self trading effort.
3:08
Speaker 1: And initially that internship was only supposed to last a year,
3:13
Speaker 1: and the guy who ran the desk essentially had the
3:16
Speaker 1: relationship with my local high school. It was a vocational
3:18
Speaker 1: high school in Chicago, and every year he'd essentially have
3:22
Speaker 1: a new student come in and it was a great
3:24
Speaker 1: opportunity to give a kid from the school some exposure.
3:28
Speaker 1: And then you you obviously have some relatively and expensive
3:31
Speaker 1: labor doing some relatively administrative things including running there and
3:36
Speaker 1: you know, supporting your your your salespeople and your traders.
3:40
Speaker 1: And that had bitually been the mob for you know,
3:43
Speaker 1: four or five years. And my situation was such where
3:48
Speaker 1: you know, I'm one of three boys. I won't get
3:50
Speaker 1: over the autobiographical here, but my brother and I we
3:53
Speaker 1: lost our parents relatively early and life where I needed
3:58
Speaker 1: to work right, So in addition to getting my education
4:02
Speaker 1: wasn't particularly optional um around if I was going to
4:06
Speaker 1: work on it. So long story short, um being aware
4:10
Speaker 1: of my personal situation, when my internship ended, I was
4:14
Speaker 1: given the opportunity to extend, and when it came time
4:18
Speaker 1: to going to undergrad, I had the opportunity to work
4:21
Speaker 1: full time. And then I end up going to undergrad
4:24
Speaker 1: full time in the evening. Again to a non traditional path,
4:27
Speaker 1: but it's one that that truly proved to be life
4:30
Speaker 1: changing in so many ways. So you're on the bond
4:33
Speaker 1: desk for a couple of years and then you moved
4:36
Speaker 1: to is this right, chief marketing officer of Morgan Stanley.
4:40
Speaker 1: That sounds like a giant position. Yeah. So I spent
4:46
Speaker 1: fourteen fifteen years in the sales and trading space. So
4:49
Speaker 1: at the mentioned started out in the muni area, moved
4:53
Speaker 1: over to credit and largely at war a number of
4:56
Speaker 1: different in the sales and distribution arena, and I had
5:00
Speaker 1: a healthy measure of success and you know, to the
5:04
Speaker 1: point vary it it's definitely far from intuitive going from
5:08
Speaker 1: being a bond salesman to chief marketing officer. And I
5:12
Speaker 1: had tried to distribute that to a couple of things. One,
5:14
Speaker 1: you know, being at an organization, as you mentioned at
5:18
Speaker 1: the beginning, you know, twenty eight years at the firm,
5:20
Speaker 1: and I happen to be fortunate to be at a
5:22
Speaker 1: place that's very much in growth mode because I think
5:25
Speaker 1: as a firm, for firm not growing, essentially the optionality
5:28
Speaker 1: of the employees is impaired. So Morgan Stanley happens to
5:31
Speaker 1: be in growth mode. Second, you know, and this is
5:34
Speaker 1: more I think specific and maybe this gets into a
5:37
Speaker 1: little bit of how I think about talent oversimplified way.
5:40
Speaker 1: You've got specialists, right, and then you've got what i'd
5:44
Speaker 1: like to call natural athletes right with with some agility.
5:47
Speaker 1: And I've I've always sort of liked to think of
5:50
Speaker 1: myself as somebody who who's got some versatility, who's got
5:54
Speaker 1: the dexterity to do a number of different things if
5:57
Speaker 1: given the opaty. And so you know, the cultural more
6:00
Speaker 1: in Stanley, as as bizarre as they sound, somebody going
6:04
Speaker 1: from fixed income to becoming CMO, which, by the way,
6:08
Speaker 1: My wife was quick to point out that I don't
6:11
Speaker 1: even have a creative bone in my body, But the
6:14
Speaker 1: firm could have decided that I still was the right
6:17
Speaker 1: guy for the opportunity. But the firm has a history
6:19
Speaker 1: of moving talent cross the ecosystem. A quick example of
6:24
Speaker 1: that is there's a guy who ran co let our
6:27
Speaker 1: fixed income business globally who is now the chief technology officer,
6:32
Speaker 1: also runs operations and has responsibility for the overall resiliency
6:36
Speaker 1: of the firm. And so if you look at some
6:38
Speaker 1: of the executives at more in Stanley, that is it's
6:40
Speaker 1: actually fairly common, more common than multiople would think. So
6:44
Speaker 1: how did you get from chief marketing officer to head
6:48
Speaker 1: of private wealth management bonds to marketing to wealth management,
6:51
Speaker 1: as you said, not the traditional career path. Yeah, like
6:56
Speaker 1: private wealth businesses business that I've I've long had a
6:59
Speaker 1: great of interest and so when I was in sales
7:02
Speaker 1: and trading in many respects my core sort of market
7:07
Speaker 1: if you were my core client, or financial advisors and
7:11
Speaker 1: by definition their clients. And so I had always been
7:14
Speaker 1: fairly proximate to the wealth management franchise and some of
7:20
Speaker 1: our most active powder parties, if you will were private
7:24
Speaker 1: wealth advisors, and so that was sort of my early
7:29
Speaker 1: if you will, to that business. And there was an
7:32
Speaker 1: individual who ran in the business you know, call it
7:34
Speaker 1: Circles two thousand five, two thousand six, who who had
7:38
Speaker 1: always been impressed with and so it was always an
7:42
Speaker 1: opportunity when I was in the in the chief marketing
7:45
Speaker 1: officer job. One of the benefits of it the first
7:47
Speaker 1: time I got an opportunity to sort of zoom out
7:50
Speaker 1: and and see the full firm ecosystem, and I got
7:53
Speaker 1: an incredibly deep appreciation for the brand of Morgan Stanley,
7:58
Speaker 1: not just in the US context, but boldly I also
8:02
Speaker 1: got an opportunity to appreciate how all of the different
8:05
Speaker 1: businesses within the firm, so from sales and trading, investment banking,
8:08
Speaker 1: prime broker, it's wealth management, investment management, how all those
8:11
Speaker 1: pieces together, and the one common denominator across each of
8:16
Speaker 1: those businesses is that private wealth essentially, you know, had
8:20
Speaker 1: a reason to be connected with teach of them. And
8:23
Speaker 1: so the fascinating thing about the private wealth business, if
8:27
Speaker 1: I had to overstand by a single word, is the
8:30
Speaker 1: complexity of it all. And so it was that complexity
8:33
Speaker 1: that that really got my attention and again that level
8:36
Speaker 1: of curiosity that I had. And so as I was
8:39
Speaker 1: in my third year as chief marketing off the firm,
8:42
Speaker 1: it was a roleout was enjoying a great deal. The
8:44
Speaker 1: opportunity presented itself, and as I mentioned earlier, it was
8:47
Speaker 1: one that I knew I was going to go after,
8:48
Speaker 1: and unfortunately Farm had the confidence to give me the mandate.
8:51
Speaker 1: And now it's been three years since I've been in
8:53
Speaker 1: the seat and it's been everything I hoped it would
8:55
Speaker 1: be quite quite interesting. So let's talk a little bit
9:00
Speaker 1: about the financial services industry. Obviously, there's a diversity problem.
9:06
Speaker 1: When I look out at the advisor space, very few women,
9:10
Speaker 1: even less people of color. It seems like it's even
9:14
Speaker 1: worse than the societal wide issues. Is there something specific
9:19
Speaker 1: to finance that it just hasn't caught up um with
9:24
Speaker 1: the diversity requirements we see in most major companies. Yeah,
9:29
Speaker 1: very I'm glad you asked me the question. Obviously there's
9:33
Speaker 1: a it's a multi faceted A start with at a
9:36
Speaker 1: at a macro level. You know that this is a
9:38
Speaker 1: structural challenge. The issue, I know we're specifically talking about diversity.
9:44
Speaker 1: When you start thinking about what I'll call the broader
9:47
Speaker 1: social injustices that are prevalent. Frankly, I would argue that
9:51
Speaker 1: they're very present across the entire social ecosystem. So this
9:56
Speaker 1: is not something that's aosyncratic to wealth management, you know,
9:59
Speaker 1: whether it's you know, the educational system, housing. The list
10:02
Speaker 1: could go, it could go on and on. I'd say,
10:05
Speaker 1: within our industry, I think we've got we've had a
10:08
Speaker 1: poor history of sourcing talent. I think that we've had
10:11
Speaker 1: some long held negative perceptions regarding you have people of
10:17
Speaker 1: color and in some instances women. And again this is
10:20
Speaker 1: to be clear, this is this more historical context, you know,
10:23
Speaker 1: which is contributed to why the results that we have
10:27
Speaker 1: today in terms of the representation that you mentioned. Why
10:30
Speaker 1: we are what we are is a is a function
10:32
Speaker 1: of things that obviously go back essentially generations, and I
10:36
Speaker 1: do think we're at a place where, you know, we've
10:39
Speaker 1: been talking about, you know, the case of diversity for
10:42
Speaker 1: for decades, you know, for the last thirty years, there's
10:44
Speaker 1: been plenty of podium fodder around the need to do it,
10:48
Speaker 1: like both on the gender front as well as from
10:51
Speaker 1: a racial perspective. And now I think we're at a
10:54
Speaker 1: place where the level of intentionality that we're seeing across
10:58
Speaker 1: the organizations at start to improve. But we've got a
11:03
Speaker 1: long way to go. I think, you know, our history
11:05
Speaker 1: of hiring talent from within what I would just simply
11:08
Speaker 1: describe as you know, common or said more specifically, majority networks,
11:13
Speaker 1: whether it's you know, college alma maters, country clubs, you know,
11:17
Speaker 1: members of lacrosse teams, and thinks of that nature. Because
11:20
Speaker 1: in the final analysis, you know, if I were to
11:23
Speaker 1: again disteal this down to a single word, I'd say,
11:27
Speaker 1: it's about, you know, trust, right, we tend to hire
11:29
Speaker 1: people that we are most comfortable with. So that's a
11:32
Speaker 1: at a macro level, very that's kind of how I
11:36
Speaker 1: how I think about, you know, the current state of play.
11:40
Speaker 1: To be sure, I am hopeful, but when you get
11:42
Speaker 1: into the nuances the wealth management business, and this is
11:48
Speaker 1: something that obviously you know better than most, You're raising
11:51
Speaker 1: money is hard, you know, especially when you are a
11:55
Speaker 1: you know, a person of color right where you're trying
11:58
Speaker 1: to do this something that's hard for anyone. You're trying
12:02
Speaker 1: to do this against a social structure in which the
12:05
Speaker 1: wealth pools are not reflective of our population. So the
12:08
Speaker 1: African American representation in this country of the population, but
12:13
Speaker 1: we hold less than three percent of the wealth. Right, So,
12:17
Speaker 1: in the spirit of trying to build and and scale
12:22
Speaker 1: a business, you have got to be able to acquire
12:26
Speaker 1: clients that don't look like you and and that in
12:30
Speaker 1: some respects that defies many of the long held you know,
12:34
Speaker 1: sort of beliefs. If you will around, you know a
12:36
Speaker 1: lot of investors, a lot of clients, a lot of LPs.
12:39
Speaker 1: They like to do business with people who look like
12:42
Speaker 1: them or you know, share a lot of the common attributes.
12:45
Speaker 1: So I do think that the measure of difficulty for
12:49
Speaker 1: people of color is pretty challenging. And the last point
12:53
Speaker 1: I'll make various is the religis to women. I think
12:56
Speaker 1: that you know, you know, in our business, you know,
12:58
Speaker 1: I think that you know, call it, of our advisors
13:02
Speaker 1: are our women. And and that's this is one that
13:05
Speaker 1: has never made sense to me when you start thinking
13:07
Speaker 1: about some of the attributes that most successful advisors have.
13:12
Speaker 1: I for one, believe that you know, women in many respects,
13:16
Speaker 1: you know, have those attributes and states. But I think
13:18
Speaker 1: many of them have had to make you very difficult
13:21
Speaker 1: life decisions around obviously raising their families and stepping away
13:26
Speaker 1: from the business. I think that there's been a tendency
13:29
Speaker 1: to to place women into support roles and service functions
13:32
Speaker 1: or what have you, versus seeing them as as having
13:36
Speaker 1: the ability to lead their own wealth practices. Now again,
13:39
Speaker 1: you know, we're seeing tremendous improvement on that front. Frankly,
13:42
Speaker 1: it's an area that I would say I'm most hopeful,
13:46
Speaker 1: but we still have a long way to go. I
13:47
Speaker 1: have so many questions to throw at you based on
13:50
Speaker 1: what you said. First, is there a cause to be
13:54
Speaker 1: optimistic that we're seeing a sea change take place? I've
13:58
Speaker 1: watched this, Michael, repeatedly over the past let's call it
14:03
Speaker 1: thirty years. This is the first time it feels like, hey,
14:08
Speaker 1: maybe something might get done. It seems that the public
14:14
Speaker 1: has become so much more aware. Used policing as an example,
14:18
Speaker 1: I think the average suburban mom was shocked to see
14:23
Speaker 1: the reaction of police against peaceful protesters over the past
14:29
Speaker 1: couple of months. Maybe this is the little bubble that
14:32
Speaker 1: I exist in, but it feels like there's a broader
14:36
Speaker 1: awareness of structural issues than I've ever seen in my
14:41
Speaker 1: lifetime anyway, or am I just being optimistic about a
14:45
Speaker 1: little feel good sensations of the moment. Yeah, like I
14:49
Speaker 1: I share your optimism very I do think this time
14:55
Speaker 1: is different, and I'm under no false illusions that you know,
15:00
Speaker 1: we're going to get too perfect on the other side
15:01
Speaker 1: of this, But I do think we've got a real
15:03
Speaker 1: shot at at better And the reason I feel that
15:06
Speaker 1: way is a couple of things. One, I think just
15:09
Speaker 1: given the confluence of events that have taken place in
15:13
Speaker 1: I mean, obviously, the COVID pandemic has forced us all
15:18
Speaker 1: to you know, into a completely different, you know space,
15:21
Speaker 1: So specifically many of us are home working virtually what
15:25
Speaker 1: have you. And so when you go back to whether
15:29
Speaker 1: it's you know, the George Floyd murder, obviously a lot
15:33
Speaker 1: of the news in the narrative around the tragedy around
15:36
Speaker 1: Brianna Taylor or mont Aubrey, and the fact that we're
15:39
Speaker 1: all home in a world where, you know, the competition
15:43
Speaker 1: for mind share is the greatest we've ever seen. But
15:46
Speaker 1: I think we've been able to focus on issues in
15:49
Speaker 1: a way that we probably wouldn't have before. So that's
15:51
Speaker 1: that's one point. The other thing, more importantly, that actually
15:54
Speaker 1: hasn't be hopeful. It's just you know, the young people.
15:57
Speaker 1: When you look at the demographics of the protesters, it's
16:02
Speaker 1: not just you know, Black Americans that are leaning in.
16:05
Speaker 1: And I think it's a tremendous amount of representation from
16:07
Speaker 1: our majority colleagues and so that ally ship, I think
16:11
Speaker 1: it's at a level that, particularly with younger generations, it's
16:15
Speaker 1: at a level that we've never seen before. And frankly,
16:18
Speaker 1: I think it is the the younger generation that is
16:20
Speaker 1: going to demand that things are a tad bit different.
16:24
Speaker 1: So I am again I'm not naive about it. It
16:28
Speaker 1: change tends to be hard. It always moved slower than
16:31
Speaker 1: you ultimately wanted to. And I think folks, you get
16:35
Speaker 1: the idea that it's not about you know, these these
16:38
Speaker 1: false binary choices of Okay, I support you know, black
16:42
Speaker 1: lives matter versus the police. Right, that's that's an oversimplification
16:47
Speaker 1: of the issue. You can actually be supportive of of
16:51
Speaker 1: both and and and again, I think the majority of
16:54
Speaker 1: people get that well. It certainly is the role of
16:57
Speaker 1: youth to agitate for change. That's been the historical role.
17:02
Speaker 1: If what we are both feeling that this seems to
17:05
Speaker 1: be a pivot point, that it is different this time,
17:09
Speaker 1: what's the reasonable guess for how long it will be before,
17:15
Speaker 1: let's take financial services, how long will it be before
17:18
Speaker 1: our industry looks a little bit more like America looks. Yeah, yeah, Look,
17:26
Speaker 1: I think it's going back to some of my earlier
17:27
Speaker 1: comments around how we got here. It took generations to
17:33
Speaker 1: to build the current state state the obvious. It will
17:37
Speaker 1: take a sustained commitment on the part of again just
17:42
Speaker 1: staying within financial services, around all the corporations that make
17:46
Speaker 1: up this great industry that we're privileged to work in,
17:49
Speaker 1: to stay focused on this, to stay intentional about it.
17:53
Speaker 1: I like to use John F. Kennedy jfk back in
17:57
Speaker 1: he made the declaration that we're going to put a
17:59
Speaker 1: man on the moon, and that didn't happen until nine nine, right,
18:02
Speaker 1: So it clearly is a process. It clearly will take
18:08
Speaker 1: a much higher level of accountability, and not just from
18:12
Speaker 1: you know, the leadership. I think you know, even from
18:14
Speaker 1: our clients. And you're starting to see this, you know,
18:17
Speaker 1: Barre as you know, play out in some of the
18:19
Speaker 1: institutional circles where institutional clients are now demanding diversity before
18:23
Speaker 1: they are willing to do business with you. And I
18:27
Speaker 1: think you know, the individual investor, the individual client hasn't
18:30
Speaker 1: quite got there yet, but but I'm encouraged that that
18:33
Speaker 1: that will be the outcome. And you and I both
18:35
Speaker 1: know that there's no better way to turbo charge change
18:38
Speaker 1: than when clients start to demand it. So again, I'm optimistic,
18:42
Speaker 1: I'm hopeful, but this is going to take a lot
18:43
Speaker 1: of work, and it's going to take, you know, a
18:45
Speaker 1: great deal of transparency and the appropriate levels of accountability
18:48
Speaker 1: to ensure we get to to a better place, and
18:51
Speaker 1: I'm hopeful we will. Last thought on this, I think
18:54
Speaker 1: people have been genuinely surprised by how much change is
18:59
Speaker 1: being forced, not by activists or investors, but by corporations themselves.
19:06
Speaker 1: Think about Nike and Colin Kaepernack. Think about what FedEx
19:10
Speaker 1: just did with the Washington football team. Is their new name.
19:14
Speaker 1: They're no longer using the Washington Redskins. They basically, I
19:18
Speaker 1: believe it was FedEx went to management and said, hey,
19:21
Speaker 1: if you don't change your name, we're withdrawing our support
19:24
Speaker 1: for your team, um and for your stadium. It's kind
19:28
Speaker 1: of shocking to see such aggressive leadership. But it's not
19:32
Speaker 1: just those two companies. We're seeing that everywhere, so so
19:36
Speaker 1: The question I'm leading to is are we going to
19:39
Speaker 1: see change come from the grassroots up? Is it going
19:42
Speaker 1: to come from the government down, or is corporate America's
19:47
Speaker 1: going to play a surprisingly outsized role in fostering change. Yeah,
19:53
Speaker 1: that's a great question. Look, I think the throughout this
19:56
Speaker 1: our country's history, I think grassroots has always been at
20:01
Speaker 1: the center and there, I say the catalysts for for change, right,
20:05
Speaker 1: So so I think that that is an evergreen sort
20:08
Speaker 1: of reality. But I think what's different now it's less
20:12
Speaker 1: about government because you know and I both know the
20:15
Speaker 1: state of our politics. You know, I would just simply
20:18
Speaker 1: say we've seen better days. I think what's different is
20:20
Speaker 1: corporate America. And this goes back to you know, you know,
20:25
Speaker 1: I'll just use Milton Freeman as as an example of
20:29
Speaker 1: there was a point in time where the paradigm of
20:32
Speaker 1: the philosophy was the role of the corporation is singular, right,
20:36
Speaker 1: that is, to produce returns for shareholders. And you fast
20:40
Speaker 1: forward to I'll just highlight the Business Roundtable, right that's
20:44
Speaker 1: made up of prominent CEOs who have come out publicly
20:47
Speaker 1: and said that the role of the corporation is beyond
20:50
Speaker 1: just you know, shareholders, it's it's our employees, it's the
20:53
Speaker 1: communities in which we work and live, and and I
20:56
Speaker 1: think you're starting to see corporations, and you gave a
20:59
Speaker 1: couple of the great amples you're lean into some of
21:02
Speaker 1: these social issues. And I personally have been encouraged by
21:05
Speaker 1: some of the public you know, not just the statements,
21:09
Speaker 1: but the public actions that we've seen in the wake
21:11
Speaker 1: of again the George Floyd's tragedy, which again gives me
21:14
Speaker 1: some hope that we can get to better place. And
21:17
Speaker 1: so this is something that has to be permeated across
21:19
Speaker 1: the entire corporate structure. So from the board of directors,
21:23
Speaker 1: you know, CEOs that are running companies. I mean, you
21:25
Speaker 1: know and I both know we only have four African
21:27
Speaker 1: Americans who are leading companies within the Fortune five hundred.
21:30
Speaker 1: But it's also got to be folks within corporations that
21:33
Speaker 1: are running businesses, sitting on operating committees, management committees, etcetera, etcetera.
21:39
Speaker 1: So I do think we're in a We're at a
21:40
Speaker 1: different sort of point in time where, in addition to
21:44
Speaker 1: the grassroots movement, I think the corporate America is going
21:48
Speaker 1: to do a better job than it has done historically,
21:51
Speaker 1: and we're starting to see some of that play out.
21:53
Speaker 1: You know, you know, I I know I said last point,
21:56
Speaker 1: but I'm fascinated by the topic. The one more lass point.
22:00
Speaker 1: If you remember marriage equality and and how much of
22:04
Speaker 1: a cultural wedge issue that was for so long. I
22:09
Speaker 1: think a lot of change bubbles up beneath the surface
22:13
Speaker 1: between the activists on one end and either government or
22:17
Speaker 1: corporations on the other. And when that sort of changed,
22:22
Speaker 1: when then Vice President Biden sort of pressed then President
22:27
Speaker 1: Obama kind of spoke out of school and pushed the
22:31
Speaker 1: issue forward almost by accident, the rest of the country
22:34
Speaker 1: was surprisingly ready for those changes. I think. I think
22:39
Speaker 1: it had slowly been morphing over time, and as you
22:42
Speaker 1: said earlier, it was the young people who were driving
22:45
Speaker 1: a lot of those changes before it became really just
22:50
Speaker 1: you know, the standards and society changes. I wonder if
22:54
Speaker 1: we're going to see something similar here that as much
22:58
Speaker 1: as this looks like a pivot point, and the concern
23:01
Speaker 1: is we've been here before. We thought things would change
23:04
Speaker 1: and they didn't, I wonder if this might change sooner
23:07
Speaker 1: than we think. Is that overly optimistic or or is
23:10
Speaker 1: there any sort of path that leads to a broader
23:15
Speaker 1: societal shift more quickly than I think we traditionally expect. Yeah,
23:21
Speaker 1: I think it depends on where you sit, and it
23:24
Speaker 1: depends on you know, how you're keeping score. I think,
23:28
Speaker 1: you know, just coming back to our industry, I think
23:30
Speaker 1: one of the areas that you know that it is
23:32
Speaker 1: far more controllable and candidly. I think you'll see much
23:37
Speaker 1: greater improvement sooner versus later, is you know, start with
23:40
Speaker 1: the analysts and the associates, right, So they often used
23:45
Speaker 1: funnel analogy right in terms of bringing people into the
23:48
Speaker 1: industry and how we recruit kids off of you know,
23:52
Speaker 1: college campuses. I think you're already starting to see that
23:54
Speaker 1: net widen where the industry used to live. As you
23:57
Speaker 1: and I both know you should live at a certain
24:00
Speaker 1: almost a fixed level of colleges and universities, because there
24:03
Speaker 1: was a view that that's where the best talent, you know, resided.
24:06
Speaker 1: I think you're already starting to see corporations or institutions
24:10
Speaker 1: get much more sophisticated how they think about sourcing talent.
24:14
Speaker 1: So I think at the top of the funnel, you'll
24:17
Speaker 1: start to see much greater not just representation of the
24:21
Speaker 1: you know, of the country. But I think you'll maybe
24:23
Speaker 1: even see organizations over in depth. And so then the
24:26
Speaker 1: key then becomes, you know, how do you ensure that
24:30
Speaker 1: the funnel isn't leaky right? How do you ensure that
24:33
Speaker 1: you retain the talent? And there's a number of tactics,
24:37
Speaker 1: whether it's obviously the off to use mentor programs. But
24:40
Speaker 1: I think one of the areas that I'd like to
24:41
Speaker 1: see quote in America get better at as relates to
24:45
Speaker 1: diverse talent is on the sponsorship side. And I think
24:50
Speaker 1: to degree we can do that more effectively. I think
24:52
Speaker 1: we'll see better, much better outcomes over time. But the
24:57
Speaker 1: thing that will take time is gain representation on our
25:01
Speaker 1: boards you have, you know, whether it's your government action
25:05
Speaker 1: like California where it's starting to you know, where they're
25:08
Speaker 1: starting to mandate it. You know, at least as a
25:10
Speaker 1: relatially number of women on boards, which I think again
25:12
Speaker 1: that that is a positive outcome, But as you write
25:15
Speaker 1: to the number of CEOs and folks running businesses, I
25:18
Speaker 1: think that that will take some time to say the least,
25:21
Speaker 1: let's talk a little bit about what's going on in
25:24
Speaker 1: the financial services industry, and you wear a lot of hats.
25:29
Speaker 1: So I I like the fact that your perspective is
25:32
Speaker 1: so broad, and let me reference a few of those. So,
25:36
Speaker 1: not only do you run Private Wealth Management, you're the
25:38
Speaker 1: co head of the institutional client Coverage group, Global Sports
25:43
Speaker 1: and Entertainment, Family Offices, Resources, International Wealth Management. Is there
25:47
Speaker 1: a lot of overlap between those areas or are those
25:50
Speaker 1: all very distinct positions. Yeah, it's a it's a great question.
25:56
Speaker 1: Very so the portfolio PWM has become a bit of
26:00
Speaker 1: a portfolio at Morgan Stanley. You know, obviously you mentioned
26:03
Speaker 1: a number of the specialty businesses that are within I'd
26:07
Speaker 1: say with p w M, the international wealth business and
26:09
Speaker 1: the sports entertainment business are very very u there's some
26:13
Speaker 1: common themes that cut across all three of them, and
26:16
Speaker 1: that common thread is ultra kind of work individuals, you know, families, foundations,
26:22
Speaker 1: and essentially the distinction becomes in the case of the
26:25
Speaker 1: international business jurisdiction rights jurisdiction where the where the client
26:30
Speaker 1: actually lives, and you know, and more Instanley, we've got
26:33
Speaker 1: a fairly robust offshore business, but all of the advisers
26:37
Speaker 1: are based here in the US. And the thing that
26:42
Speaker 1: made sense to us strategically, is why separate businesses just
26:47
Speaker 1: based on where the source of wealth is because as
26:50
Speaker 1: you and I know, the issues, the challenges that families
26:54
Speaker 1: of affluence are looking to solve frankly are quite similar,
26:59
Speaker 1: you know, as you go round around the world. So
27:01
Speaker 1: that was that logic. And then the sports and are
27:03
Speaker 1: the same. Business is a is a unique segment where
27:06
Speaker 1: clearly you have a lot of ultra high net worth
27:09
Speaker 1: individuals across all of our professional sports or across the
27:13
Speaker 1: industry of of of entertainment. And as we know, right,
27:16
Speaker 1: the not only is a source of wealth different the
27:20
Speaker 1: duration of income right just given the contractual nature of
27:24
Speaker 1: many of those clients are a bit unique. That requires
27:27
Speaker 1: a certain amount of expertise, But for pulling those businesses
27:30
Speaker 1: together just made a good deal of sense for us.
27:33
Speaker 1: And then the institutional client covers business kind of hearkens
27:36
Speaker 1: back to my my old days of being in the
27:39
Speaker 1: cells and trading business. It is largely execuity, fixed income
27:43
Speaker 1: focused on institutional clients. So that's a little bit different.
27:47
Speaker 1: But there are pockets of overlap, especially when you're talking
27:51
Speaker 1: about the family office. So let's talk a little bit
27:54
Speaker 1: about some of the bigger themes we've seen in the
27:57
Speaker 1: wealth management business, one has been in a bit of
28:00
Speaker 1: a shift from larger wire houses two independent r I
28:05
Speaker 1: A s. What are you guys doing too, tracked and
28:08
Speaker 1: retain talents in the face of industry wide. It's been
28:13
Speaker 1: a pretty broad trend. Yeah, you know, it's interesting and
28:17
Speaker 1: I see a lot of reporting on the shift from
28:22
Speaker 1: the defection from the wirehouse to the to the independent channel.
28:26
Speaker 1: And you know, it's interesting as we as we have
28:29
Speaker 1: this conversation very you know more in Stanley, we're having
28:33
Speaker 1: our best net recruiting year ever and so said simply,
28:39
Speaker 1: you know that it just hasn't been our reality. And
28:42
Speaker 1: I don't say that out of arrogance or surely not hubrious,
28:47
Speaker 1: but but we have not actually seen a material defection
28:51
Speaker 1: of talent going independent. Look, I believe our value proposition
28:56
Speaker 1: at our firm is it's obviously our brand, you know,
28:59
Speaker 1: eighty five years in the making, and I like to
29:02
Speaker 1: believe that that's real currency for advisors out in the marketplace.
29:05
Speaker 1: We talk a lot about our platform, how robust it is,
29:09
Speaker 1: our scale, which allows us to invest back in the
29:13
Speaker 1: business at a level that's not easily replicated in the marketplace,
29:17
Speaker 1: and then most importantly, and it's just something I trust
29:19
Speaker 1: would resonate with you, is our entrepreneurial culture. Right, our
29:24
Speaker 1: advisors have a tremendous amount of flexibility uh to to
29:29
Speaker 1: run their business. Of course, there's you know, we have
29:31
Speaker 1: our control partners to make sure that everything we do
29:34
Speaker 1: is in the spirit of of what's in the best
29:36
Speaker 1: interest for clients. But we try to maintain that entrepreneurial
29:41
Speaker 1: culture and that flexibility, and so that combined with you know,
29:45
Speaker 1: strong local leadership and our branches across the country, our
29:48
Speaker 1: leadership senior leadership team, which I'm a part of that,
29:51
Speaker 1: but you know Vincivalmia who runs the field, Dany Sapristein
29:56
Speaker 1: who runs abroad of business, and we try to be
29:58
Speaker 1: fairly proximate to our advisors, right, so they feel like
30:01
Speaker 1: it's truly a real partnership. But I I'd say, when
30:06
Speaker 1: when you combine world class investment bank, world class investment management,
30:12
Speaker 1: world class wealth management, that's extraordinarily open in terms of
30:16
Speaker 1: our platform, open architecture, I think that the combination of
30:20
Speaker 1: those things has been a real driver of retention UH force.
30:26
Speaker 1: And that's not to say again that we don't lose
30:27
Speaker 1: talent of course we do, but we're not seeing it
30:32
Speaker 1: at such a clip where we would define it as
30:34
Speaker 1: a problem quite fascinating them. Let's talk a little bit
30:39
Speaker 1: about what clients are looking for these days. There has
30:43
Speaker 1: been a huge shift in inflows over the past twenty
30:47
Speaker 1: years from the more actively managed portfolios to the more
30:52
Speaker 1: passive indexes. How are you seeing this play out with
30:56
Speaker 1: your clients and with what people are looking for in
31:01
Speaker 1: what's become a very violatile environment. Yeah, as you know,
31:04
Speaker 1: and I think about our business, We've got three million
31:07
Speaker 1: clients obviously who sit at various levels of the risk spectrum,
31:12
Speaker 1: if you will. Clearly, the megatrain towards passive is something
31:16
Speaker 1: that's that's impacted the you know, the entire industry. But
31:20
Speaker 1: but look, I think that it's also fair to say
31:23
Speaker 1: that we still have, particularly when you go up market,
31:26
Speaker 1: you still have a huge population of investors who are
31:31
Speaker 1: incredibly focused on idiosyncratic driven alpha and and want to
31:38
Speaker 1: partake in partner with if you will invest with UH,
31:42
Speaker 1: you know, active managers that are out in the marketplace.
31:45
Speaker 1: So yeah, BETA has has definitely you know, UH engulfed
31:50
Speaker 1: UH the industry. But I think when you get into
31:52
Speaker 1: periods like frankly we've experienced this year, you know, having
31:56
Speaker 1: those managers who've who have demonstrated a consistent sort of
32:02
Speaker 1: track record of delivering set alpha for clients. You know, Frankly,
32:06
Speaker 1: you know, I think they're going to continue to win
32:09
Speaker 1: in the marketplace. So so, yeah, we've got a lot
32:12
Speaker 1: of clients who are you know, doing passive investing, etcetera.
32:15
Speaker 1: But they're absolutely complementing that with with the best of
32:18
Speaker 1: the best managers out there. Uh makes sense. What about
32:21
Speaker 1: E s G investing, Environmental, societal and governance. That seems
32:26
Speaker 1: to be something that looks like it's going to become
32:29
Speaker 1: more popular each year. But when we track it certainly
32:33
Speaker 1: captures a lot of mind share, but when we track
32:36
Speaker 1: the flows, it hasn't really done as well as well.
32:40
Speaker 1: Certainly not passive, but it seems to be pretty steady
32:44
Speaker 1: and not growing well that much. What are you seeing
32:47
Speaker 1: in that space? Yeah, look, I I more I said,
32:50
Speaker 1: we've been We've been focused on what I just called
32:53
Speaker 1: categorically the sustainability effort for some time and we established
32:57
Speaker 1: an Institute of Sustainable about ten years ago. Our CEO
33:02
Speaker 1: chairs at Audrew Troy, our chief sustainability officer has been
33:06
Speaker 1: been leaning on this topic for some time, and this
33:09
Speaker 1: is almost very likely diversity conversation that we we had earlier,
33:13
Speaker 1: and that's you know, there's been a lot of podium
33:16
Speaker 1: fodder around E s G and sustainability for decades, but
33:21
Speaker 1: I would say over the last four or five years,
33:23
Speaker 1: you're really starting to see change take place, where again,
33:29
Speaker 1: I think the thesis around E s G. I think
33:33
Speaker 1: that's been fairly compelling, and I think you're starting to
33:38
Speaker 1: see and I'll just speak to to my firm in
33:40
Speaker 1: terms of just you know, capital flows. You know, we're
33:43
Speaker 1: starting to see a meaningful shift, and we're hearing this
33:46
Speaker 1: from clients, pretty meaningful. Clients from family offices are starting
33:50
Speaker 1: to to talk about it. But when you have a
33:52
Speaker 1: firm like black Rock, which obviously is the biggest player
33:56
Speaker 1: in the in the asset management space, and Larry think
33:58
Speaker 1: is obviously devoted a tremendous amount of his platform to
34:01
Speaker 1: the topic, I think that's where you're gonna start to
34:04
Speaker 1: see a bit of an acceleration. So the product periferation
34:07
Speaker 1: is starting to happen. To your point, the capital flows
34:11
Speaker 1: probably not as robust as some other areas, but but
34:14
Speaker 1: I think it's coming. I think it's inevitable in my
34:16
Speaker 1: own personal view, you know, I don't. I don't disagree
34:19
Speaker 1: with that. So I'm calling you from my master bedroom
34:23
Speaker 1: at home. You're at home. Most of the country is
34:27
Speaker 1: still working in challenging conditions due to the COVID nineteen pandemic.
34:33
Speaker 1: What sort of unique challenges have been thrown at you
34:37
Speaker 1: running the private wealth management of Morgan Stanley due to
34:40
Speaker 1: the lockdown, the pandemic, etcetera. How is this impacting how
34:44
Speaker 1: you guys run your business and deal with clients. Yeah?
34:48
Speaker 1: I mean if you know, you go back to you know,
34:51
Speaker 1: the first second week of March, and if you'd set
34:56
Speaker 1: to me that the firm of the businesses gonna go
35:00
Speaker 1: completely virtual and everyone who's going to be working from home,
35:05
Speaker 1: my reaction to that would have been one of great concerns.
35:11
Speaker 1: Fast forward to where we are and today we still
35:14
Speaker 1: have over our employees who are working virtually all across
35:18
Speaker 1: the country. And when I tell you Barry that the plant,
35:22
Speaker 1: while it's been pressure tested, that the plan is doing
35:25
Speaker 1: extraordinarily well, I couldnt be you know, frankly, more surprised,
35:30
Speaker 1: but said better, more impressed with the level of productivity
35:36
Speaker 1: that we've been seeing from from our advisors, from their
35:39
Speaker 1: support teams. You know, when you look at the business
35:43
Speaker 1: results of the firm obviously announced earnings a couple of
35:45
Speaker 1: weeks ago, the firm, not just Women Wealth Management, but
35:49
Speaker 1: just across the entire plant perform the firm is performing
35:53
Speaker 1: extraordinarily well. Now, obviously underneath those headlines, I mean, there's
35:58
Speaker 1: a lot of complexive. You know, we've obviously had to
36:01
Speaker 1: go through the heartbreak, like you know, frankly all the
36:04
Speaker 1: organizations where you've lost people. We've lost a few employees.
36:08
Speaker 1: We've had employees who've lost family members as a result
36:11
Speaker 1: of COVID. But even when you have folks who've lost relatives,
36:15
Speaker 1: even if it doesn't have anything to do with COVID,
36:17
Speaker 1: the fact that we can't grieve the way that we
36:20
Speaker 1: used to. There's obviously a great deal of concern around
36:23
Speaker 1: just isolation, right, folks being isolated mental health is a
36:28
Speaker 1: topic that we're spending a good deal of time on.
36:30
Speaker 1: So so, while at a macro level, really pleased with
36:34
Speaker 1: how we've been able to perform, clearly it's given how
36:38
Speaker 1: unnatural this is. There are some some people related issues
36:42
Speaker 1: that that we remain very, very concerned about You know,
36:45
Speaker 1: I I totally agree, But you mentioned a key word
36:49
Speaker 1: that I think surprised a lot of people to the upside,
36:52
Speaker 1: and that's productivity. Given how productive everybody who has the
36:59
Speaker 1: luxury of being able to work from home have been,
37:02
Speaker 1: what does that mean when we go back to work
37:05
Speaker 1: when when fast forward, I'm gonna make up a number,
37:10
Speaker 1: there's a vaccine that's hurt immunately, we're going out to
37:13
Speaker 1: shows and eating in restaurants and doors. Again, do we
37:17
Speaker 1: go back to work and what does that look like?
37:20
Speaker 1: Does everybody come back to work or you know, it
37:23
Speaker 1: raises a question do we really need to have office
37:26
Speaker 1: towers filled with people when so many folks so comfortably
37:31
Speaker 1: and so efficiently can get their jobs done at a distance. Well,
37:36
Speaker 1: you know, very it's funny when you were talking about
37:39
Speaker 1: two and you were you hit on some of the highlights.
37:41
Speaker 1: You know, we're at at restaurants, we're going to shows again.
37:44
Speaker 1: I will just tell you, partner, I cannot wait for
37:47
Speaker 1: that to happen. Like a big smile came on on
37:50
Speaker 1: my face because I missed all of that so much.
37:53
Speaker 1: And the way we think about it that at morning
37:55
Speaker 1: Stanley is we're going to be incredibly responsible in terms
37:58
Speaker 1: of how we return to work. And I don't think
38:01
Speaker 1: the new world, uh well, we're on the other side
38:04
Speaker 1: of this goes back to the old world. I think
38:06
Speaker 1: it's it's not going to be this bin area of
38:09
Speaker 1: you know, do our work in the office or do
38:10
Speaker 1: our work remotely. I think it's going to be both.
38:13
Speaker 1: I think we've proven that the added flexibility of folks
38:16
Speaker 1: being able to work virtually is an asset for us,
38:20
Speaker 1: and so I do think that that's going to forever
38:22
Speaker 1: be a part of our workplace strategy going forward. But
38:26
Speaker 1: I also think, you know, again, just speaking for my firm,
38:29
Speaker 1: I think that we understand the importance of community and
38:33
Speaker 1: culture and having our folks together will always be a
38:38
Speaker 1: key part of our d NA, you know if you will. So,
38:41
Speaker 1: I don't anticipate any material downshift in our real estate
38:46
Speaker 1: sack could be fair, but can you maintain your your
38:50
Speaker 1: office space presence, but but also make sure that your employees,
38:54
Speaker 1: when and where appropriate, have the flexibility to work remotely
38:58
Speaker 1: when necessary apps little and so that's where I think
39:01
Speaker 1: will land. But I also will will highlight you know,
39:04
Speaker 1: another big positive very of of the virtual world, no one,
39:08
Speaker 1: our clients. We've seen just a massive uptake in um
39:12
Speaker 1: what I would just simply call the digicization of our
39:17
Speaker 1: wealth management business. And the fact that clients are now
39:21
Speaker 1: comfortable with you meeting with their advisor over zoom is
39:25
Speaker 1: going to be a big benefit to us. You know,
39:27
Speaker 1: we've got support teams resources that support our advisors. Like
39:31
Speaker 1: if you think about our estate planning specialists or philanthropy specialists,
39:36
Speaker 1: where they're they're jumping on planes all the time and
39:38
Speaker 1: trying to go meet with advisors and go meet with clients.
39:41
Speaker 1: We're gonna be able to be a heck of a
39:42
Speaker 1: lot more efficient in terms of how we collaborate and
39:45
Speaker 1: how we deliver resources to advisors and clients because again,
39:49
Speaker 1: we're now all so much more comfortable at video conferencing.
39:52
Speaker 1: So I think that there's gonna be a lot of
39:54
Speaker 1: positive things from the work from home world that will
39:58
Speaker 1: ultimurely make its way to the old world, if you will.
40:03
Speaker 1: That will make for a much better uh working binders
40:06
Speaker 1: for advisors, for clients, etcetera. Yeah, I agree, and probably
40:11
Speaker 1: with a higher quality of life if you're spending less
40:14
Speaker 1: time in airports and hotels, especially if you have young
40:18
Speaker 1: kids or a family. You mentioned clients. Let me throw
40:21
Speaker 1: a few questions to you about some clients. First of all,
40:26
Speaker 1: what are you hearing from your clients about the economy.
40:30
Speaker 1: I know, the single biggest question I've been hearing lately
40:33
Speaker 1: is has the stock market gone crazy? How is it
40:36
Speaker 1: decoupled so totally from the economy. What are you hearing
40:40
Speaker 1: from clients? Yeah, you know, but that's definitely one of
40:44
Speaker 1: the main themes, the dichotomy of what's happening in the
40:50
Speaker 1: markets right where we are literally sitting back at historic
40:53
Speaker 1: hives from you know, the the underlying economy, and we
40:57
Speaker 1: know where we are with with unemployment and the state
41:01
Speaker 1: of small business, etcetera across the country. So so we
41:05
Speaker 1: see a couple of things. Number one, you know, cast
41:07
Speaker 1: positions have absolutely jumped. I think our cast position that
41:12
Speaker 1: in private wealth is up from where it was just
41:15
Speaker 1: a year ago. And I think you can think about
41:17
Speaker 1: that in both defensive and offensive ways. So defensively, you've
41:20
Speaker 1: got some folks who don't believe the hype, right they
41:23
Speaker 1: believe we've come back way too fast and the underlying
41:27
Speaker 1: fundamentals don't support it. Now at the macro level Morgan Stanley.
41:31
Speaker 1: Our research team has been calling for a V shape recovery.
41:34
Speaker 1: But even within that that thesis, I don't I don't
41:38
Speaker 1: know if we were necessarily envisioned the markets being you know,
41:40
Speaker 1: have snapped back as qutly as they have, and so
41:43
Speaker 1: I do think that there's a good deal of caution
41:46
Speaker 1: on a part of many of our clients. So so
41:47
Speaker 1: many of them have raised cash because again it's just
41:50
Speaker 1: defensive posturing. Now the other side of that is you've
41:54
Speaker 1: got clients who are playing offense here and so they've
41:58
Speaker 1: raised cast because they want to actually you know, have
42:00
Speaker 1: how to drive to take advantage of some of the
42:02
Speaker 1: math dislocations that we've seen in the markets. And so
42:06
Speaker 1: some of that will take place obviously in the private
42:08
Speaker 1: equity market. Some of that will take place obviously in
42:10
Speaker 1: growth equity or adventure. But some of that is this,
42:13
Speaker 1: you know, taken advantage of dislocations that exist in and
42:18
Speaker 1: what I was just simply called, you know, a regular
42:20
Speaker 1: way you know, sort of equity business. So so you've
42:22
Speaker 1: got that that happening. So that's one thing. The other
42:25
Speaker 1: thing that we're seeing on a path of clients is
42:28
Speaker 1: I mentioned this earlier. The estate planning engagement is just
42:33
Speaker 1: on fire right clients, you know, whether it's you know,
42:36
Speaker 1: around taxes, and maybe that has something to do with
42:38
Speaker 1: the factive word in an election year and folks are
42:40
Speaker 1: starting to reposition. But I think more importantly, given the
42:44
Speaker 1: devastation that we've seen, going back to COVID for a second,
42:48
Speaker 1: I think that folks, particularly multigenerational families are really taking
42:53
Speaker 1: a long hard look at the various structures that are
42:56
Speaker 1: housing their assets. Uh, and there are they are as engaged.
43:00
Speaker 1: And maybe again maybe because we're all home now, there
43:03
Speaker 1: is engaged and is focused on some of these more
43:05
Speaker 1: emotional things than act seen surely since I've been running
43:09
Speaker 1: the business. So looking at grass as an example, just
43:12
Speaker 1: given where obviously where interest rates are just just one
43:16
Speaker 1: example sets the second thing and the third thing is
43:19
Speaker 1: and maybe this is just a function of where interest
43:21
Speaker 1: rates are, you know a great deal of activity on
43:23
Speaker 1: the other side of the balance sheet, on the liability
43:25
Speaker 1: side of the balance sheet, where aldohindah Worth clients are
43:29
Speaker 1: borrowing at a level that is far faster, much faster
43:34
Speaker 1: than than any of our other segments. And so so
43:38
Speaker 1: the demands or the the the appetite for capital is
43:42
Speaker 1: definitely very much alive. And well, yeah, it wouldn't surprise me.
43:45
Speaker 1: What why sell an asset if you don't want to
43:48
Speaker 1: when cash is practically free? I think was it two
43:52
Speaker 1: weeks ago mortgage rates hit their lowest level ever. That
43:56
Speaker 1: that's some some incredible data. So you mentioned not only
44:00
Speaker 1: the defensive move to cash, but also the offensive move
44:05
Speaker 1: to cash. It raises a question, do you hear from
44:08
Speaker 1: clients concerned about market valuation? Is the sensation stocks have
44:14
Speaker 1: run too far, too fast off the lows, But what
44:17
Speaker 1: sort of valuation pushback are you getting these days? Yeah?
44:21
Speaker 1: I think that you know, that's a debate that's playing out,
44:23
Speaker 1: and that's the beauty of markets. As year and I
44:25
Speaker 1: both know there's a bit and there there's an ask.
44:27
Speaker 1: But you've you've got you know, some clients and me,
44:29
Speaker 1: look at what we're seeing on the metals front. Look
44:32
Speaker 1: at what's happening with gold. Right, you've got some clients
44:35
Speaker 1: who are not as I said earlier, they don't believe
44:38
Speaker 1: the hype and they believe that a material correction could
44:42
Speaker 1: be in the offing. Now you've got the other school
44:45
Speaker 1: of thought, right, that's you know, the long held true
44:48
Speaker 1: since the truth, but the long held view of don't
44:50
Speaker 1: fight to fit and just the extraordinary amount of stimulus
44:53
Speaker 1: that we've seen obviously from central banks around the world,
44:56
Speaker 1: and then obviously from a fiscal policy perspective, obviously con
45:00
Speaker 1: risks and in the White House are in the throes
45:02
Speaker 1: of debating, you know, the next round and the next leg.
45:05
Speaker 1: But when you take a step back, as you know,
45:07
Speaker 1: not both knowping in this business for as long as
45:09
Speaker 1: we have, I mean, the action is unlike anything that
45:12
Speaker 1: not just the action, but the speed of the action
45:14
Speaker 1: is unlike anything we've ever seen before. And so the
45:18
Speaker 1: debate is the irrespective of the underlying fundamentals. Are we
45:21
Speaker 1: at a place now where there's so much money floating
45:24
Speaker 1: around our system that you know, markets will continue to
45:27
Speaker 1: their perpetual move higher. But that's a debate that's playing out.
45:30
Speaker 1: But you've got some clients who are you know, basically
45:33
Speaker 1: taking risk off the table, leveraging structure products. You've got
45:38
Speaker 1: some folks who again are putting a ton of money
45:41
Speaker 1: in uh in gold and other precious metal instruments because
45:45
Speaker 1: again they think that you know, there's going to be
45:47
Speaker 1: this unleashing of inflation at some point and the market
45:51
Speaker 1: is going to going to some significant downturn. But yeah,
45:55
Speaker 1: that's the life we've chosen, partner, as you know, to
45:58
Speaker 1: say the least. Last client question, are you getting any
46:03
Speaker 1: concerns or questions about the upcoming election? We heard a
46:08
Speaker 1: ton of stuff heading into and right after the election.
46:13
Speaker 1: It's been a little quieter this time around from what
46:16
Speaker 1: I'm hearing. I'm curious as to what you guys are hearing.
46:20
Speaker 1: I think it's uh, you know, it depends to start with,
46:23
Speaker 1: you know where on the political you know spectrum you said.
46:26
Speaker 1: I mean, ultimately, it's been relatively quiet, and I think
46:30
Speaker 1: that's true even with with institutional investors. But now we're
46:35
Speaker 1: getting close. But it's surely when we get on the
46:38
Speaker 1: other side of Labor Day. I think that the election
46:40
Speaker 1: will clearly dominate the markets and will dominate mind share
46:44
Speaker 1: for reasons. And let me just let me just clarify, Amanda,
46:47
Speaker 1: let me just I'm starting interrupt. Let me just clarify.
46:51
Speaker 1: I don't mean what are people asking about who you
46:55
Speaker 1: think is gonna win, or what's going to happen in
46:57
Speaker 1: the center or anything like that. I mean specific Hey,
47:01
Speaker 1: what happens if there's a major shift. If there's a
47:03
Speaker 1: blue wave and the Senate flips and Biden wins, what
47:07
Speaker 1: does that mean from my taxes? What does that mean
47:09
Speaker 1: for my portfolio? That's right, That's right. Yeah, Now, I
47:12
Speaker 1: think that that's exactly where I was going. I think,
47:14
Speaker 1: you know, there's if THEE and I both noticed if
47:17
Speaker 1: you look at the you know, the history of the
47:20
Speaker 1: irrespective of who's in the White House and and almost
47:23
Speaker 1: in some respects there respective of who's you know, dominating Congress,
47:27
Speaker 1: that that the performance in the markets, right are are
47:30
Speaker 1: far more similar than I think most people believe. But
47:34
Speaker 1: where I was going was we've not seen what I
47:38
Speaker 1: would describe as material movement of capital or you know,
47:43
Speaker 1: just simply say, you know, asset class repositioning where you know,
47:48
Speaker 1: you feel like there's a link to perspective or potential
47:52
Speaker 1: outcomes from the election. But what we have seen is
47:56
Speaker 1: amongst some of our multi generational families that I talked
47:59
Speaker 1: a lot of about a state planning where folks are
48:03
Speaker 1: becoming increasingly sensitive to tax policy. Right. So so that's
48:09
Speaker 1: one where uh, you know, it's pretty intuitive to me
48:12
Speaker 1: if one is assuming it's just called it a Biden
48:15
Speaker 1: presidency in assuming that taxes are going higher, you know,
48:19
Speaker 1: we have started to see against still relatively early days,
48:23
Speaker 1: families start to get a little bit more concerned and
48:25
Speaker 1: focused on That makes sense. And our last question about
48:29
Speaker 1: the industry, we see some of the real tech driven startups,
48:33
Speaker 1: apps like robin Hoods that are popular amongst the younger
48:36
Speaker 1: day traders, or platforms like Betterments that are using algorithms
48:41
Speaker 1: to manage portfolios. Where do you see the future of
48:46
Speaker 1: technology going. Is it something that's going to replace advisors
48:50
Speaker 1: or is it going to be a supplement and a
48:53
Speaker 1: tool used by advisors. Yeah, it's I'm really glad you
48:58
Speaker 1: Yeah you asked me this question, and Barry, because I
49:02
Speaker 1: think the there's this assumption right that the incumbent firms
49:09
Speaker 1: at risk of being disrupted and clearly whether it's Betterment
49:14
Speaker 1: or robin Hood, and there's some some great what I
49:16
Speaker 1: would call digital natives that have come to market that
49:20
Speaker 1: that frankly I think are healthy for the industry. And
49:25
Speaker 1: before I get more specific, I will say that I
49:27
Speaker 1: think the beauty of the digital natives, as I call them,
49:32
Speaker 1: is I think that it's forced um incumbent our firm
49:36
Speaker 1: included right to turbocharge, the shift from a paper print
49:40
Speaker 1: fact ecosystem to a largely digital one. So I think
49:43
Speaker 1: that that's been one of the more pronounced implications of
49:47
Speaker 1: these digital platforms that have emerged. But but but I'm
49:52
Speaker 1: going to be direct about this. I'd say that folks
49:55
Speaker 1: assume we're going to be disrupted, and we actually have
49:58
Speaker 1: the view that given again as I said earlier, our brand,
50:02
Speaker 1: our size, our scale, that we can actually be the
50:06
Speaker 1: disrupt or of of the industry, and our base view
50:11
Speaker 1: in terms of the future state is that it's not
50:14
Speaker 1: a man woman versus machine, right. We actually think it's
50:17
Speaker 1: going to be man woman plus machine. Right. So that's
50:20
Speaker 1: the bet that we are making. And so having world
50:23
Speaker 1: class talent with world class technology, we believe that we're
50:28
Speaker 1: going to be in position to dominate. Right. And so ultimately,
50:32
Speaker 1: because we're big does not mean that we're going to
50:34
Speaker 1: be clunky and slow. We think we're going to be
50:36
Speaker 1: superinformed and uh and have the ability to respond to
50:41
Speaker 1: forces early on. Right, So these disruptive forces that tend
50:44
Speaker 1: to captivate us. And so the thing that I would say,
50:47
Speaker 1: you're Barry, that has has been a key part of
50:52
Speaker 1: our strategy of the last couple of years. Is that
50:54
Speaker 1: there was a time where if you want to do
50:55
Speaker 1: wealth management with Morgan Stanley, going back to our origins
50:59
Speaker 1: in the Wealth Business Acting seventy seven, we only dealt
51:03
Speaker 1: with what we're you know, my business right the ultra
51:05
Speaker 1: high networks. So PWM was the only offering, and I'd
51:09
Speaker 1: like to use the analogy of BMW. You know, BMW
51:12
Speaker 1: makes the ultimate driving machine. There was a time when
51:15
Speaker 1: more instantly only sold seven series. But our strategies evolved
51:19
Speaker 1: over the last number of years and where you know,
51:22
Speaker 1: whether it's our digit if you want to engage with
51:23
Speaker 1: us digital in a digital way only, we've got you know,
51:27
Speaker 1: a Globo platform. If you want access to a person
51:31
Speaker 1: but you know, don't necessarily need a dedicated financial advisor,
51:34
Speaker 1: we've got a virtual advisor offering. And then obviously if
51:37
Speaker 1: you want to engage with us you know via one
51:39
Speaker 1: of our world class teams that that's an area that
51:41
Speaker 1: we've always been specialized in that space. So we now
51:44
Speaker 1: sell three series, we sell five series, and we also
51:47
Speaker 1: sell seven series, and so at the heart of in
51:50
Speaker 1: terms of meeting clients where they are, you know, whether
51:53
Speaker 1: it's you know, direct to client Obviously, the e Trade acquisition,
51:56
Speaker 1: which you know about, is something that we think is
51:58
Speaker 1: going to be a real competitive advantage for us, not
52:02
Speaker 1: just in terms of just the DTC, but just the
52:04
Speaker 1: technology that they're going to bring to bear. I mean,
52:07
Speaker 1: there's been this broader workplace strategy, like we think that
52:09
Speaker 1: that's going to be the next frontier of winning clients,
52:12
Speaker 1: if you will, is going to companies and sitting down
52:16
Speaker 1: with chief human resource officers and helping them grapple with
52:20
Speaker 1: you know, one of the great stressors that their employees have,
52:22
Speaker 1: and that's obviously their financial wellness. And so so it's
52:25
Speaker 1: just comprehensives three sixties strategy that we have that we
52:28
Speaker 1: think it's going to help us be um I met
52:31
Speaker 1: winner not just in current state but future state. Well, well,
52:35
Speaker 1: I certainly do love a good car reference when we're
52:37
Speaker 1: referring to financial I know I only have you for
52:41
Speaker 1: a few more minutes. So before we let you go,
52:44
Speaker 1: let's jump to our speed rounds and our favorite five
52:48
Speaker 1: questions that we ask all of our guests. Let's jump
52:51
Speaker 1: right into it. Tell us what you're streaming these days.
52:54
Speaker 1: Give us your favorite either Netflix or Amazon or any
52:57
Speaker 1: podcast you might be listening to what What's Key? Can
53:00
Speaker 1: you entertained during lockdown? Yeah? Sure, when my wife and
53:04
Speaker 1: I can take control of our television and we're not
53:07
Speaker 1: watching Frozen two or Laddin. You know that our our
53:10
Speaker 1: girls love to watch. I'd say it's a couple of things.
53:13
Speaker 1: Number one being a Chicago kid. Of course, the Last Dance,
53:17
Speaker 1: you know, the the Jordan era amazing, you know now
53:22
Speaker 1: the second you want to go dark? Ozarks is definitely
53:26
Speaker 1: a show that we'll keep you in. Pretty good suspense Billions.
53:29
Speaker 1: I don't think it's as popular as it was, but
53:32
Speaker 1: I'm still very much, you know, watching Billions. There's a
53:35
Speaker 1: new show that that my wife turned me on too,
53:38
Speaker 1: and actually Andy sapristein who runs a business, have been
53:42
Speaker 1: talking about money. Heist is another Netflix gym that I'm
53:45
Speaker 1: just starting to get into. And then lastly, my wife
53:47
Speaker 1: and I we have one of our girls is artistic,
53:51
Speaker 1: beautiful daughter Jaden. And there's a show on Netflix that
53:53
Speaker 1: we love called a Typical. So so those are the
53:56
Speaker 1: those are the shows that that jump out at me
53:58
Speaker 1: when I think about, you know, extreming diet. I'm familiar
54:02
Speaker 1: with just about everything you you listed. Both my nephew
54:05
Speaker 1: who was on a bond trading desk, and my sister
54:08
Speaker 1: are huge advocate of money. Hei, It's in our que
54:12
Speaker 1: and we're definitely gonna get to that. Tell us about
54:14
Speaker 1: your early mentors who helped shape your career from high
54:18
Speaker 1: school to college to professionally. Yeah, whatever I think about mentorship,
54:23
Speaker 1: I always have to start very a little earlier than that.
54:26
Speaker 1: Like I always have to give you props to my uncle's,
54:29
Speaker 1: my older brother. I mean, they were they were the
54:31
Speaker 1: folks who the early early extremely raw you know Mandel.
54:37
Speaker 1: They played a huge role in that, and and then
54:39
Speaker 1: surviving the streets of Chicago. You know, this wouldn't be
54:42
Speaker 1: possible if it wasn't for that. But then you start
54:44
Speaker 1: to get into a professional context. There was a guy
54:48
Speaker 1: named John Whalen who hired me at Morigan Stanley. You know,
54:52
Speaker 1: again as high school kid who showed up to interview
54:55
Speaker 1: in a gold suit, you know, in a black shirt,
54:58
Speaker 1: knew nothing about the BA is this The guy took
55:02
Speaker 1: a chance on me, so I'll be be forever grateful
55:05
Speaker 1: to him. And then there's a a guy by the
55:07
Speaker 1: name of Kevin Morano who I worked for I mentioned
55:11
Speaker 1: and fixed in town and he's the guy who gave
55:13
Speaker 1: me my first leadership position, and he remains a close
55:17
Speaker 1: mentor you know, confidant to this day. And again, I
55:21
Speaker 1: I take leadership very seriously, and and he was the
55:24
Speaker 1: guy who served as my early example. And then there's
55:28
Speaker 1: a host of folks around Morden Stanley today that that
55:31
Speaker 1: obviously continue to invest the time and effort and basically
55:35
Speaker 1: serving as my sort of personal board of advisors as
55:38
Speaker 1: rich to my career. So I've been I've been incredibly fortunate.
55:41
Speaker 1: What are some of your favorite books? What are you
55:43
Speaker 1: reading currently? Yeah, so I'm a I'm an avid reader,
55:48
Speaker 1: fairly diverse mix of books. One over the last couple
55:53
Speaker 1: of months that have resonated with me is Can't Hurt
55:56
Speaker 1: Me by David Goggins. If you want to, you know,
55:59
Speaker 1: sort of make sure you you if you want to
56:02
Speaker 1: put yourself where you want to go beyond uh, you're
56:06
Speaker 1: what you think you're capable of doing. I would, I
56:08
Speaker 1: would strongly implore your listeners to read Can't Hurt Me.
56:13
Speaker 1: You know what you do is who you are by
56:15
Speaker 1: being Horowitz like a fascinating read that's largely about about
56:19
Speaker 1: largely about culture, talking to Strangers from my favorite author,
56:22
Speaker 1: Malcolm Gladwell. It's something that I've read fairly recently Becoming
56:27
Speaker 1: by Michelle Obama, again a fellow Chicagoan and obviously former
56:30
Speaker 1: First Lady. It was a great read. And then most
56:33
Speaker 1: recently Right of a Lifetime by Bob Eger. Fascinating story.
56:37
Speaker 1: I mean, he's you know, dare I say, like Bob,
56:40
Speaker 1: you know, I've been at one firm my entire career,
56:44
Speaker 1: and yess, mergers and acquisitions along the way. But when
56:47
Speaker 1: you hear Bob's story and how he literally started at
56:51
Speaker 1: the bottom of the company and obviously you got to
56:53
Speaker 1: the point of being one of Disney's most renowned and
56:59
Speaker 1: memor mobile CEOs. And it's just a fascinating story. And
57:04
Speaker 1: he goes into again as the mergers in the acquisitions
57:08
Speaker 1: took place, you know what the implications was for him personally.
57:11
Speaker 1: Just an incredible, incredible person in story. And so so
57:15
Speaker 1: those are the book that comes to mind from me there.
57:17
Speaker 1: What sort of advice would you give to a recent
57:20
Speaker 1: college graduate who was interested in a career in wealth management?
57:26
Speaker 1: So first, I would say it's important for young people
57:28
Speaker 1: generally to understand that careers are not linear as you
57:32
Speaker 1: and I both know, sir, it's their securities journeys and
57:36
Speaker 1: my career has definitely been an example of that. So
57:39
Speaker 1: that's one. The second thing I sort of put in
57:43
Speaker 1: this category of of what I call the Big three
57:46
Speaker 1: high degree of self confidence, right, the the ability to
57:51
Speaker 1: manage your insecurities. We all have them, right, They prop
57:55
Speaker 1: up all the time, and I just think it's it's
57:57
Speaker 1: incredibly important to to be able to and your insecurities
58:01
Speaker 1: over time. And then lastly, which is probably most important
58:03
Speaker 1: for young people, impulse control, the ability to control, you know,
58:09
Speaker 1: your impulses and just not make career decisions based on
58:12
Speaker 1: emotions or snap decisions or what have you. And that's
58:15
Speaker 1: something that you see that's fairly common with young people.
58:17
Speaker 1: What do you know about the world of wealth management
58:20
Speaker 1: investing today that you wish you knew years ago or
58:25
Speaker 1: so when you were first getting started. You know, having
58:27
Speaker 1: the vision of is in hindsight is is a wonderful thing,
58:33
Speaker 1: and I wish I wish we we had it more
58:35
Speaker 1: real time. If there's one thing I would simply say,
58:39
Speaker 1: and I'm being cute here, partner, is I would have
58:41
Speaker 1: gone long rates thirty years ago and if I had
58:46
Speaker 1: if I had, if I had done that idea a
58:48
Speaker 1: fairly wealthy individual. In all seriousness, I think that the
58:53
Speaker 1: one we have come to learn and appreciate its business
58:56
Speaker 1: and history proves this time and time again is you know,
59:01
Speaker 1: having a well thought out plan and sticking to that
59:05
Speaker 1: plan through good markets and bad markets, tends to be
59:09
Speaker 1: the thing that over time tends to win. The day
59:12
Speaker 1: that you're trying to be this active and aggressive investor
59:15
Speaker 1: that's going in and out of markets, trying to time
59:17
Speaker 1: just being has humbled humbled many So I just to
59:21
Speaker 1: simply say, you know, financial planning, which is clearly a
59:24
Speaker 1: thing today, is something that essentially I should have. I
59:28
Speaker 1: wish it had been codified, you know, thirty years ago
59:32
Speaker 1: because it's that powerful. Thank you, Mandel Crawley for being
59:36
Speaker 1: so generous with your time. We have been speaking with
59:40
Speaker 1: Mandel Crawley, head of the Private Wealth Management Group at
59:43
Speaker 1: Morgan Stanley. If you enjoy this conversation, well, be sure
59:47
Speaker 1: and check out any of the previous three hundred and
59:50
Speaker 1: fifties such discussions we've had over the past six years.
59:54
Speaker 1: You can find that wherever your Finder podcasts are sold Apple, iTunes, Stitcher, Spotify,
1:00:01
Speaker 1: We love your comments, feedback, in suggestions. Write to us
1:00:05
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1:00:13
Speaker 1: up for our daily reads at Ridholtz dot com. Give
1:00:17
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1:00:22
Speaker 1: not thank the crack team that helps us put together
1:00:25
Speaker 1: these conversations each week. Reggie Bazil is our audio engineer.
1:00:31
Speaker 1: Michael Boyle is my producer slash booker. Michael Batnick is
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Speaker 1: my head of research. A tick of Val Brond is
1:00:38
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Speaker 1: Master Some Business on Bloomberg Radio.