Mandell Crawley on the Private Wealth Business (Podcast)

private wealth management at Morgan Stanley. We have a fascinating conversation not only about wealth management, about working in a giant firm and how one starts as an intern and works their way up to a really important and influential position, but how he as a person of color, deals with the lack of diversity in the industry and what various companies are doing about the lack of people of color, the lack of females in investment management, How this happened

and why there are reasons to be hopeful that change has begun not only in a grassroots basis, but in corporate America as well, and that this isn't merely another cycle where people make noise and then it fades. It looks like things are changing and for the better. So if you are at all interested in wealth management, how to attract and recruit top talent, how to build a

financial services firm, you will find this conversation to be fascinating. So, with no further ado, my conversation with Morgan Stanley's Mandel Crawley. This is Masters in Business with Barry Ridholts on Bloomberg Radio. My special guest today is Mandel Crawley. He is the head of Private Wealth Management at Morgan Stanley. Along with wearing a number of other hats uh, he has an MBA from Formham University and has spent his entire career

at Morgan Stanley. Mandel Crawley, Welcome to Bloomberg. I appreciate it. It is really good to be here with you. Thanks for having me on my pleasure. So I mentioned you spent your whole career at Morgan. Tell us about how you first got started in the final actual services industry. What did you imagine your career would be like? Yeah, you know, thanks very I have to tell you my past.

The finance is unorthodox, to say the least. I started as a high school intern at one of more Elitis predecessor firms at Dean Winter And you know, at the time it was a work study commitment, making five dollars an hour, working about twenty hours a week. I had zero interests in finance. Me frankly, I had every intention at that time of my young life to be an educator.

But you know, through this internship, I got exposed to financial services, specifically the cells and trading business, the capital markets. Happened to work with a group of professionals who took a real interest in me. And the rest is, as they say, history. So how long were you an intern four and what eventually led you to working on a barn desk? So the internship was reporting about fifteen folks. It was a muni minicipal bond public finance self trading effort.

And initially that internship was only supposed to last a year, and the guy who ran the desk essentially had the relationship with my local high school. It was a vocational high school in Chicago, and every year he'd essentially have a new student come in and it was a great opportunity to give a kid from the school some exposure.

And then you you obviously have some relatively and expensive labor doing some relatively administrative things including running there and you know, supporting your your your salespeople and your traders. And that had bitually been the mob for you know, four or five years. And my situation was such where

you know, I'm one of three boys. I won't get over the autobiographical here, but my brother and I we lost our parents relatively early and life where I needed to work right, So in addition to getting my education wasn't particularly optional um around if I was going to work on it. So long story short, um being aware of my personal situation, when my internship ended, I was given the opportunity to extend, and when it came time to going to undergrad, I had the opportunity to work

full time. And then I end up going to undergrad full time in the evening. Again to a non traditional path, but it's one that that truly proved to be life changing in so many ways. So you're on the bond desk for a couple of years and then you moved to is this right, chief marketing officer of Morgan Stanley. That sounds like a giant position. Yeah. So I spent

fourteen fifteen years in the sales and trading space. So at the mentioned started out in the muni area, moved over to credit and largely at war a number of different in the sales and distribution arena, and I had a healthy measure of success and you know, to the point vary it it's definitely far from intuitive going from being a bond salesman to chief marketing officer. And I

had tried to distribute that to a couple of things. One, you know, being at an organization, as you mentioned at the beginning, you know, twenty eight years at the firm, and I happen to be fortunate to be at a place that's very much in growth mode because I think as a firm, for firm not growing, essentially the optionality of the employees is impaired. So Morgan Stanley happens to

be in growth mode. Second, you know, and this is more I think specific and maybe this gets into a little bit of how I think about talent oversimplified way. You've got specialists, right, and then you've got what i'd like to call natural athletes right with with some agility. And I've I've always sort of liked to think of myself as somebody who who's got some versatility, who's got the dexterity to do a number of different things if

given the opaty. And so you know, the cultural more in Stanley, as as bizarre as they sound, somebody going from fixed income to becoming CMO, which, by the way, My wife was quick to point out that I don't even have a creative bone in my body, But the firm could have decided that I still was the right guy for the opportunity. But the firm has a history

of moving talent cross the ecosystem. A quick example of that is there's a guy who ran co let our fixed income business globally who is now the chief technology officer, also runs operations and has responsibility for the overall resiliency of the firm. And so if you look at some of the executives at more in Stanley, that is it's

actually fairly common, more common than multiople would think. So how did you get from chief marketing officer to head of private wealth management bonds to marketing to wealth management, as you said, not the traditional career path. Yeah, like private wealth businesses business that I've I've long had a great of interest and so when I was in sales and trading in many respects my core sort of market if you were my core client, or financial advisors and

by definition their clients. And so I had always been fairly proximate to the wealth management franchise and some of our most active powder parties, if you will were private wealth advisors, and so that was sort of my early if you will, to that business. And there was an individual who ran in the business you know, call it Circles two thousand five, two thousand six, who who had always been impressed with and so it was always an opportunity when I was in the in the chief marketing

officer job. One of the benefits of it the first time I got an opportunity to sort of zoom out and and see the full firm ecosystem, and I got an incredibly deep appreciation for the brand of Morgan Stanley, not just in the US context, but boldly I also got an opportunity to appreciate how all of the different businesses within the firm, so from sales and trading, investment banking, prime broker, it's wealth management, investment management, how all those

pieces together, and the one common denominator across each of those businesses is that private wealth essentially, you know, had a reason to be connected with teach of them. And so the fascinating thing about the private wealth business, if I had to overstand by a single word, is the complexity of it all. And so it was that complexity that that really got my attention and again that level of curiosity that I had. And so as I was in my third year as chief marketing off the firm,

it was a roleout was enjoying a great deal. The opportunity presented itself, and as I mentioned earlier, it was one that I knew I was going to go after, and unfortunately Farm had the confidence to give me the mandate. And now it's been three years since I've been in the seat and it's been everything I hoped it would be quite quite interesting. So let's talk a little bit about the financial services industry. Obviously, there's a diversity problem.

When I look out at the advisor space, very few women, even less people of color. It seems like it's even worse than the societal wide issues. Is there something specific to finance that it just hasn't caught up um with the diversity requirements we see in most major companies. Yeah, very I'm glad you asked me the question. Obviously there's a it's a multi faceted A start with at a at a macro level. You know that this is a

structural challenge. The issue, I know we're specifically talking about diversity. When you start thinking about what I'll call the broader social injustices that are prevalent. Frankly, I would argue that they're very present across the entire social ecosystem. So this is not something that's aosyncratic to wealth management, you know, whether it's you know, the educational system, housing. The list could go, it could go on and on. I'd say, within our industry, I think we've got we've had a

poor history of sourcing talent. I think that we've had some long held negative perceptions regarding you have people of color and in some instances women. And again this is to be clear, this is this more historical context, you know, which is contributed to why the results that we have

today in terms of the representation that you mentioned. Why we are what we are is a is a function of things that obviously go back essentially generations, and I do think we're at a place where, you know, we've been talking about, you know, the case of diversity for for decades, you know, for the last thirty years, there's been plenty of podium fodder around the need to do it, like both on the gender front as well as from

a racial perspective. And now I think we're at a place where the level of intentionality that we're seeing across the organizations at start to improve. But we've got a long way to go. I think, you know, our history of hiring talent from within what I would just simply describe as you know, common or said more specifically, majority networks, whether it's you know, college alma maters, country clubs, you know,

members of lacrosse teams, and thinks of that nature. Because in the final analysis, you know, if I were to again disteal this down to a single word, I'd say, it's about, you know, trust, right, we tend to hire people that we are most comfortable with. So that's a at a macro level, very that's kind of how I how I think about, you know, the current state of play.

To be sure, I am hopeful, but when you get into the nuances the wealth management business, and this is something that obviously you know better than most, You're raising money is hard, you know, especially when you are a you know, a person of color right where you're trying to do this something that's hard for anyone. You're trying to do this against a social structure in which the

wealth pools are not reflective of our population. So the African American representation in this country of the population, but we hold less than three percent of the wealth. Right, So, in the spirit of trying to build and and scale a business, you have got to be able to acquire clients that don't look like you and and that in some respects that defies many of the long held you know, sort of beliefs. If you will around, you know a lot of investors, a lot of clients, a lot of LPs.

They like to do business with people who look like them or you know, share a lot of the common attributes. So I do think that the measure of difficulty for people of color is pretty challenging. And the last point I'll make various is the religis to women. I think that you know, you know, in our business, you know, I think that you know, call it, of our advisors

are our women. And and that's this is one that has never made sense to me when you start thinking about some of the attributes that most successful advisors have. I for one, believe that you know, women in many respects, you know, have those attributes and states. But I think many of them have had to make you very difficult life decisions around obviously raising their families and stepping away

from the business. I think that there's been a tendency to to place women into support roles and service functions or what have you, versus seeing them as as having the ability to lead their own wealth practices. Now again, you know, we're seeing tremendous improvement on that front. Frankly, it's an area that I would say I'm most hopeful, but we still have a long way to go. I have so many questions to throw at you based on what you said. First, is there a cause to be

optimistic that we're seeing a sea change take place? I've watched this, Michael, repeatedly over the past let's call it thirty years. This is the first time it feels like, hey, maybe something might get done. It seems that the public has become so much more aware. Used policing as an example, I think the average suburban mom was shocked to see the reaction of police against peaceful protesters over the past

couple of months. Maybe this is the little bubble that I exist in, but it feels like there's a broader awareness of structural issues than I've ever seen in my lifetime anyway, or am I just being optimistic about a

little feel good sensations of the moment. Yeah, like I I share your optimism very I do think this time is different, and I'm under no false illusions that you know, we're going to get too perfect on the other side of this, But I do think we've got a real shot at at better And the reason I feel that

way is a couple of things. One, I think just given the confluence of events that have taken place in I mean, obviously, the COVID pandemic has forced us all to you know, into a completely different, you know space, So specifically many of us are home working virtually what

have you. And so when you go back to whether it's you know, the George Floyd murder, obviously a lot of the news in the narrative around the tragedy around Brianna Taylor or mont Aubrey, and the fact that we're all home in a world where, you know, the competition for mind share is the greatest we've ever seen. But I think we've been able to focus on issues in a way that we probably wouldn't have before. So that's that's one point. The other thing, more importantly, that actually

hasn't be hopeful. It's just you know, the young people. When you look at the demographics of the protesters, it's not just you know, Black Americans that are leaning in. And I think it's a tremendous amount of representation from our majority colleagues and so that ally ship, I think it's at a level that, particularly with younger generations, it's

at a level that we've never seen before. And frankly, I think it is the the younger generation that is going to demand that things are a tad bit different. So I am again I'm not naive about it. It change tends to be hard. It always moved slower than you ultimately wanted to. And I think folks, you get the idea that it's not about you know, these these false binary choices of Okay, I support you know, black lives matter versus the police. Right, that's that's an oversimplification

of the issue. You can actually be supportive of of both and and and again, I think the majority of people get that well. It certainly is the role of youth to agitate for change. That's been the historical role. If what we are both feeling that this seems to be a pivot point, that it is different this time, what's the reasonable guess for how long it will be before, let's take financial services, how long will it be before

our industry looks a little bit more like America looks. Yeah, yeah, Look, I think it's going back to some of my earlier comments around how we got here. It took generations to to build the current state state the obvious. It will take a sustained commitment on the part of again just staying within financial services, around all the corporations that make up this great industry that we're privileged to work in, to stay focused on this, to stay intentional about it.

I like to use John F. Kennedy jfk back in he made the declaration that we're going to put a man on the moon, and that didn't happen until nine nine, right, So it clearly is a process. It clearly will take a much higher level of accountability, and not just from you know, the leadership. I think you know, even from our clients. And you're starting to see this, you know, Barre as you know, play out in some of the institutional circles where institutional clients are now demanding diversity before

they are willing to do business with you. And I think you know, the individual investor, the individual client hasn't quite got there yet, but but I'm encouraged that that that will be the outcome. And you and I both know that there's no better way to turbo charge change

than when clients start to demand it. So again, I'm optimistic, I'm hopeful, but this is going to take a lot of work, and it's going to take, you know, a great deal of transparency and the appropriate levels of accountability to ensure we get to to a better place, and I'm hopeful we will. Last thought on this, I think people have been genuinely surprised by how much change is being forced, not by activists or investors, but by corporations themselves.

Think about Nike and Colin Kaepernack. Think about what FedEx just did with the Washington football team. Is their new name. They're no longer using the Washington Redskins. They basically, I believe it was FedEx went to management and said, hey, if you don't change your name, we're withdrawing our support for your team, um and for your stadium. It's kind of shocking to see such aggressive leadership. But it's not

just those two companies. We're seeing that everywhere, so so The question I'm leading to is are we going to see change come from the grassroots up? Is it going to come from the government down, or is corporate America's going to play a surprisingly outsized role in fostering change. Yeah,

that's a great question. Look, I think the throughout this our country's history, I think grassroots has always been at the center and there, I say the catalysts for for change, right, So so I think that that is an evergreen sort of reality. But I think what's different now it's less about government because you know and I both know the state of our politics. You know, I would just simply say we've seen better days. I think what's different is

corporate America. And this goes back to you know, you know, I'll just use Milton Freeman as as an example of there was a point in time where the paradigm of the philosophy was the role of the corporation is singular, right,

that is, to produce returns for shareholders. And you fast forward to I'll just highlight the Business Roundtable, right that's made up of prominent CEOs who have come out publicly and said that the role of the corporation is beyond just you know, shareholders, it's it's our employees, it's the communities in which we work and live, and and I think you're starting to see corporations, and you gave a couple of the great amples you're lean into some of

these social issues. And I personally have been encouraged by some of the public you know, not just the statements, but the public actions that we've seen in the wake of again the George Floyd's tragedy, which again gives me some hope that we can get to better place. And so this is something that has to be permeated across the entire corporate structure. So from the board of directors,

you know, CEOs that are running companies. I mean, you know and I both know we only have four African Americans who are leading companies within the Fortune five hundred. But it's also got to be folks within corporations that are running businesses, sitting on operating committees, management committees, etcetera, etcetera.

So I do think we're in a We're at a different sort of point in time where, in addition to the grassroots movement, I think the corporate America is going to do a better job than it has done historically, and we're starting to see some of that play out. You know, you know, I I know I said last point, but I'm fascinated by the topic. The one more lass point. If you remember marriage equality and and how much of

a cultural wedge issue that was for so long. I think a lot of change bubbles up beneath the surface between the activists on one end and either government or corporations on the other. And when that sort of changed, when then Vice President Biden sort of pressed then President Obama kind of spoke out of school and pushed the issue forward almost by accident, the rest of the country

was surprisingly ready for those changes. I think. I think it had slowly been morphing over time, and as you said earlier, it was the young people who were driving a lot of those changes before it became really just you know, the standards and society changes. I wonder if we're going to see something similar here that as much as this looks like a pivot point, and the concern is we've been here before. We thought things would change and they didn't, I wonder if this might change sooner

than we think. Is that overly optimistic or or is there any sort of path that leads to a broader societal shift more quickly than I think we traditionally expect. Yeah, I think it depends on where you sit, and it depends on you know, how you're keeping score. I think, you know, just coming back to our industry, I think one of the areas that you know that it is

far more controllable and candidly. I think you'll see much greater improvement sooner versus later, is you know, start with the analysts and the associates, right, So they often used funnel analogy right in terms of bringing people into the industry and how we recruit kids off of you know, college campuses. I think you're already starting to see that

net widen where the industry used to live. As you and I both know you should live at a certain almost a fixed level of colleges and universities, because there was a view that that's where the best talent, you know, resided. I think you're already starting to see corporations or institutions get much more sophisticated how they think about sourcing talent. So I think at the top of the funnel, you'll start to see much greater not just representation of the

you know, of the country. But I think you'll maybe even see organizations over in depth. And so then the key then becomes, you know, how do you ensure that the funnel isn't leaky right? How do you ensure that you retain the talent? And there's a number of tactics, whether it's obviously the off to use mentor programs. But I think one of the areas that I'd like to see quote in America get better at as relates to diverse talent is on the sponsorship side. And I think

to degree we can do that more effectively. I think we'll see better, much better outcomes over time. But the thing that will take time is gain representation on our boards you have, you know, whether it's your government action like California where it's starting to you know, where they're

starting to mandate it. You know, at least as a relatially number of women on boards, which I think again that that is a positive outcome, But as you write to the number of CEOs and folks running businesses, I think that that will take some time to say the least, let's talk a little bit about what's going on in the financial services industry, and you wear a lot of hats. So I I like the fact that your perspective is

so broad, and let me reference a few of those. So, not only do you run Private Wealth Management, you're the co head of the institutional client Coverage group, Global Sports and Entertainment, Family Offices, Resources, International Wealth Management. Is there a lot of overlap between those areas or are those all very distinct positions. Yeah, it's a it's a great question. Very so the portfolio PWM has become a bit of

a portfolio at Morgan Stanley. You know, obviously you mentioned a number of the specialty businesses that are within I'd say with p w M, the international wealth business and the sports entertainment business are very very u there's some common themes that cut across all three of them, and that common thread is ultra kind of work individuals, you know, families, foundations, and essentially the distinction becomes in the case of the

international business jurisdiction rights jurisdiction where the where the client actually lives, and you know, and more Instanley, we've got a fairly robust offshore business, but all of the advisers are based here in the US. And the thing that made sense to us strategically, is why separate businesses just based on where the source of wealth is because as you and I know, the issues, the challenges that families of affluence are looking to solve frankly are quite similar,

you know, as you go round around the world. So that was that logic. And then the sports and are the same. Business is a is a unique segment where clearly you have a lot of ultra high net worth individuals across all of our professional sports or across the industry of of of entertainment. And as we know, right, the not only is a source of wealth different the duration of income right just given the contractual nature of

many of those clients are a bit unique. That requires a certain amount of expertise, But for pulling those businesses together just made a good deal of sense for us. And then the institutional client covers business kind of hearkens back to my my old days of being in the cells and trading business. It is largely execuity, fixed income focused on institutional clients. So that's a little bit different. But there are pockets of overlap, especially when you're talking

about the family office. So let's talk a little bit about some of the bigger themes we've seen in the wealth management business, one has been in a bit of a shift from larger wire houses two independent r I A s. What are you guys doing too, tracked and retain talents in the face of industry wide. It's been a pretty broad trend. Yeah, you know, it's interesting and I see a lot of reporting on the shift from the defection from the wirehouse to the to the independent channel.

And you know, it's interesting as we as we have this conversation very you know more in Stanley, we're having our best net recruiting year ever and so said simply, you know that it just hasn't been our reality. And I don't say that out of arrogance or surely not hubrious, but but we have not actually seen a material defection

of talent going independent. Look, I believe our value proposition at our firm is it's obviously our brand, you know, eighty five years in the making, and I like to believe that that's real currency for advisors out in the marketplace. We talk a lot about our platform, how robust it is, our scale, which allows us to invest back in the business at a level that's not easily replicated in the marketplace, and then most importantly, and it's just something I trust

would resonate with you, is our entrepreneurial culture. Right, our advisors have a tremendous amount of flexibility uh to to run their business. Of course, there's you know, we have our control partners to make sure that everything we do is in the spirit of of what's in the best

interest for clients. But we try to maintain that entrepreneurial culture and that flexibility, and so that combined with you know, strong local leadership and our branches across the country, our leadership senior leadership team, which I'm a part of that, but you know Vincivalmia who runs the field, Dany Sapristein who runs abroad of business, and we try to be fairly proximate to our advisors, right, so they feel like

it's truly a real partnership. But I I'd say, when when you combine world class investment bank, world class investment management, world class wealth management, that's extraordinarily open in terms of our platform, open architecture, I think that the combination of those things has been a real driver of retention UH force. And that's not to say again that we don't lose talent of course we do, but we're not seeing it at such a clip where we would define it as

a problem quite fascinating them. Let's talk a little bit about what clients are looking for these days. There has been a huge shift in inflows over the past twenty years from the more actively managed portfolios to the more passive indexes. How are you seeing this play out with your clients and with what people are looking for in

what's become a very violatile environment. Yeah, as you know, and I think about our business, We've got three million clients obviously who sit at various levels of the risk spectrum, if you will. Clearly, the megatrain towards passive is something

that's that's impacted the you know, the entire industry. But but look, I think that it's also fair to say that we still have, particularly when you go up market, you still have a huge population of investors who are incredibly focused on idiosyncratic driven alpha and and want to partake in partner with if you will invest with UH, you know, active managers that are out in the marketplace. So yeah, BETA has has definitely you know, UH engulfed

UH the industry. But I think when you get into periods like frankly we've experienced this year, you know, having those managers who've who have demonstrated a consistent sort of track record of delivering set alpha for clients. You know, Frankly, you know, I think they're going to continue to win in the marketplace. So so, yeah, we've got a lot of clients who are you know, doing passive investing, etcetera. But they're absolutely complementing that with with the best of

the best managers out there. Uh makes sense. What about E s G investing, Environmental, societal and governance. That seems to be something that looks like it's going to become more popular each year. But when we track it certainly captures a lot of mind share, but when we track the flows, it hasn't really done as well as well. Certainly not passive, but it seems to be pretty steady and not growing well that much. What are you seeing

in that space? Yeah, look, I I more I said, we've been We've been focused on what I just called categorically the sustainability effort for some time and we established

an Institute of Sustainable about ten years ago. Our CEO chairs at Audrew Troy, our chief sustainability officer has been been leaning on this topic for some time, and this is almost very likely diversity conversation that we we had earlier, and that's you know, there's been a lot of podium fodder around E s G and sustainability for decades, but I would say over the last four or five years, you're really starting to see change take place, where again, I think the thesis around E s G. I think

that's been fairly compelling, and I think you're starting to see and I'll just speak to to my firm in terms of just you know, capital flows. You know, we're starting to see a meaningful shift, and we're hearing this from clients, pretty meaningful. Clients from family offices are starting

to to talk about it. But when you have a firm like black Rock, which obviously is the biggest player in the in the asset management space, and Larry think is obviously devoted a tremendous amount of his platform to the topic, I think that's where you're gonna start to see a bit of an acceleration. So the product periferation is starting to happen. To your point, the capital flows probably not as robust as some other areas, but but I think it's coming. I think it's inevitable in my

own personal view, you know, I don't. I don't disagree with that. So I'm calling you from my master bedroom at home. You're at home. Most of the country is still working in challenging conditions due to the COVID nineteen pandemic. What sort of unique challenges have been thrown at you running the private wealth management of Morgan Stanley due to the lockdown, the pandemic, etcetera. How is this impacting how you guys run your business and deal with clients. Yeah?

I mean if you know, you go back to you know, the first second week of March, and if you'd set to me that the firm of the businesses gonna go completely virtual and everyone who's going to be working from home, my reaction to that would have been one of great concerns. Fast forward to where we are and today we still have over our employees who are working virtually all across

the country. And when I tell you Barry that the plant, while it's been pressure tested, that the plan is doing extraordinarily well, I couldnt be you know, frankly, more surprised, but said better, more impressed with the level of productivity that we've been seeing from from our advisors, from their

support teams. You know, when you look at the business results of the firm obviously announced earnings a couple of weeks ago, the firm, not just Women Wealth Management, but just across the entire plant perform the firm is performing extraordinarily well. Now, obviously underneath those headlines, I mean, there's a lot of complexive. You know, we've obviously had to go through the heartbreak, like you know, frankly all the organizations where you've lost people. We've lost a few employees.

We've had employees who've lost family members as a result of COVID. But even when you have folks who've lost relatives, even if it doesn't have anything to do with COVID, the fact that we can't grieve the way that we used to. There's obviously a great deal of concern around just isolation, right, folks being isolated mental health is a topic that we're spending a good deal of time on. So so, while at a macro level, really pleased with how we've been able to perform, clearly it's given how

unnatural this is. There are some some people related issues that that we remain very, very concerned about You know, I I totally agree, But you mentioned a key word that I think surprised a lot of people to the upside, and that's productivity. Given how productive everybody who has the luxury of being able to work from home have been, what does that mean when we go back to work when when fast forward, I'm gonna make up a number, there's a vaccine that's hurt immunately, we're going out to

shows and eating in restaurants and doors. Again, do we go back to work and what does that look like? Does everybody come back to work or you know, it raises a question do we really need to have office towers filled with people when so many folks so comfortably and so efficiently can get their jobs done at a distance. Well, you know, very it's funny when you were talking about two and you were you hit on some of the highlights. You know, we're at at restaurants, we're going to shows again.

I will just tell you, partner, I cannot wait for that to happen. Like a big smile came on on my face because I missed all of that so much. And the way we think about it that at morning Stanley is we're going to be incredibly responsible in terms of how we return to work. And I don't think the new world, uh well, we're on the other side of this goes back to the old world. I think it's it's not going to be this bin area of you know, do our work in the office or do

our work remotely. I think it's going to be both. I think we've proven that the added flexibility of folks being able to work virtually is an asset for us, and so I do think that that's going to forever be a part of our workplace strategy going forward. But I also think, you know, again, just speaking for my firm, I think that we understand the importance of community and culture and having our folks together will always be a

key part of our d NA, you know if you will. So, I don't anticipate any material downshift in our real estate sack could be fair, but can you maintain your your office space presence, but but also make sure that your employees, when and where appropriate, have the flexibility to work remotely when necessary apps little and so that's where I think will land. But I also will will highlight you know, another big positive very of of the virtual world, no one,

our clients. We've seen just a massive uptake in um what I would just simply call the digicization of our wealth management business. And the fact that clients are now comfortable with you meeting with their advisor over zoom is going to be a big benefit to us. You know,

we've got support teams resources that support our advisors. Like if you think about our estate planning specialists or philanthropy specialists, where they're they're jumping on planes all the time and trying to go meet with advisors and go meet with clients. We're gonna be able to be a heck of a lot more efficient in terms of how we collaborate and how we deliver resources to advisors and clients because again, we're now all so much more comfortable at video conferencing.

So I think that there's gonna be a lot of positive things from the work from home world that will ultimurely make its way to the old world, if you will. That will make for a much better uh working binders for advisors, for clients, etcetera. Yeah, I agree, and probably with a higher quality of life if you're spending less time in airports and hotels, especially if you have young kids or a family. You mentioned clients. Let me throw

a few questions to you about some clients. First of all, what are you hearing from your clients about the economy. I know, the single biggest question I've been hearing lately is has the stock market gone crazy? How is it decoupled so totally from the economy. What are you hearing

from clients? Yeah, you know, but that's definitely one of the main themes, the dichotomy of what's happening in the markets right where we are literally sitting back at historic hives from you know, the the underlying economy, and we know where we are with with unemployment and the state of small business, etcetera across the country. So so we see a couple of things. Number one, you know, cast

positions have absolutely jumped. I think our cast position that in private wealth is up from where it was just a year ago. And I think you can think about that in both defensive and offensive ways. So defensively, you've got some folks who don't believe the hype, right they believe we've come back way too fast and the underlying fundamentals don't support it. Now at the macro level Morgan Stanley. Our research team has been calling for a V shape recovery.

But even within that that thesis, I don't I don't know if we were necessarily envisioned the markets being you know, have snapped back as qutly as they have, and so I do think that there's a good deal of caution on a part of many of our clients. So so many of them have raised cash because again it's just

defensive posturing. Now the other side of that is you've got clients who are playing offense here and so they've raised cast because they want to actually you know, have how to drive to take advantage of some of the math dislocations that we've seen in the markets. And so some of that will take place obviously in the private equity market. Some of that will take place obviously in

growth equity or adventure. But some of that is this, you know, taken advantage of dislocations that exist in and what I was just simply called, you know, a regular way you know, sort of equity business. So so you've got that that happening. So that's one thing. The other thing that we're seeing on a path of clients is

I mentioned this earlier. The estate planning engagement is just on fire right clients, you know, whether it's you know, around taxes, and maybe that has something to do with the factive word in an election year and folks are starting to reposition. But I think more importantly, given the devastation that we've seen, going back to COVID for a second, I think that folks, particularly multigenerational families are really taking a long hard look at the various structures that are

housing their assets. Uh, and there are they are as engaged. And maybe again maybe because we're all home now, there is engaged and is focused on some of these more emotional things than act seen surely since I've been running

the business. So looking at grass as an example, just given where obviously where interest rates are just just one example sets the second thing and the third thing is and maybe this is just a function of where interest rates are, you know a great deal of activity on the other side of the balance sheet, on the liability side of the balance sheet, where aldohindah Worth clients are borrowing at a level that is far faster, much faster

than than any of our other segments. And so so the demands or the the the appetite for capital is definitely very much alive. And well, yeah, it wouldn't surprise me. What why sell an asset if you don't want to when cash is practically free? I think was it two weeks ago mortgage rates hit their lowest level ever. That that's some some incredible data. So you mentioned not only the defensive move to cash, but also the offensive move to cash. It raises a question, do you hear from

clients concerned about market valuation? Is the sensation stocks have run too far, too fast off the lows, But what sort of valuation pushback are you getting these days? Yeah? I think that you know, that's a debate that's playing out, and that's the beauty of markets. As year and I both know there's a bit and there there's an ask. But you've you've got you know, some clients and me, look at what we're seeing on the metals front. Look

at what's happening with gold. Right, you've got some clients who are not as I said earlier, they don't believe the hype and they believe that a material correction could

be in the offing. Now you've got the other school of thought, right, that's you know, the long held true since the truth, but the long held view of don't fight to fit and just the extraordinary amount of stimulus that we've seen obviously from central banks around the world, and then obviously from a fiscal policy perspective, obviously con risks and in the White House are in the throes of debating, you know, the next round and the next leg.

But when you take a step back, as you know, not both knowping in this business for as long as we have, I mean, the action is unlike anything that not just the action, but the speed of the action is unlike anything we've ever seen before. And so the debate is the irrespective of the underlying fundamentals. Are we at a place now where there's so much money floating around our system that you know, markets will continue to their perpetual move higher. But that's a debate that's playing out.

But you've got some clients who are you know, basically taking risk off the table, leveraging structure products. You've got some folks who again are putting a ton of money in uh in gold and other precious metal instruments because again they think that you know, there's going to be this unleashing of inflation at some point and the market is going to going to some significant downturn. But yeah, that's the life we've chosen, partner, as you know, to

say the least. Last client question, are you getting any concerns or questions about the upcoming election? We heard a ton of stuff heading into and right after the election. It's been a little quieter this time around from what I'm hearing. I'm curious as to what you guys are hearing. I think it's uh, you know, it depends to start with, you know where on the political you know spectrum you said. I mean, ultimately, it's been relatively quiet, and I think

that's true even with with institutional investors. But now we're getting close. But it's surely when we get on the other side of Labor Day. I think that the election will clearly dominate the markets and will dominate mind share for reasons. And let me just let me just clarify, Amanda, let me just I'm starting interrupt. Let me just clarify. I don't mean what are people asking about who you think is gonna win, or what's going to happen in the center or anything like that. I mean specific Hey,

what happens if there's a major shift. If there's a blue wave and the Senate flips and Biden wins, what does that mean from my taxes? What does that mean for my portfolio? That's right, That's right. Yeah, Now, I

think that that's exactly where I was going. I think, you know, there's if THEE and I both noticed if you look at the you know, the history of the irrespective of who's in the White House and and almost in some respects there respective of who's you know, dominating Congress, that that the performance in the markets, right are are

far more similar than I think most people believe. But where I was going was we've not seen what I would describe as material movement of capital or you know, just simply say, you know, asset class repositioning where you know, you feel like there's a link to perspective or potential outcomes from the election. But what we have seen is amongst some of our multi generational families that I talked a lot of about a state planning where folks are

becoming increasingly sensitive to tax policy. Right. So so that's one where uh, you know, it's pretty intuitive to me if one is assuming it's just called it a Biden presidency in assuming that taxes are going higher, you know, we have started to see against still relatively early days, families start to get a little bit more concerned and

focused on That makes sense. And our last question about the industry, we see some of the real tech driven startups, apps like robin Hoods that are popular amongst the younger day traders, or platforms like Betterments that are using algorithms to manage portfolios. Where do you see the future of technology going. Is it something that's going to replace advisors or is it going to be a supplement and a

tool used by advisors. Yeah, it's I'm really glad you Yeah you asked me this question, and Barry, because I think the there's this assumption right that the incumbent firms at risk of being disrupted and clearly whether it's Betterment or robin Hood, and there's some some great what I would call digital natives that have come to market that

that frankly I think are healthy for the industry. And before I get more specific, I will say that I think the beauty of the digital natives, as I call them, is I think that it's forced um incumbent our firm included right to turbocharge, the shift from a paper print fact ecosystem to a largely digital one. So I think that that's been one of the more pronounced implications of these digital platforms that have emerged. But but but I'm

going to be direct about this. I'd say that folks assume we're going to be disrupted, and we actually have the view that given again as I said earlier, our brand, our size, our scale, that we can actually be the disrupt or of of the industry, and our base view in terms of the future state is that it's not a man woman versus machine, right. We actually think it's going to be man woman plus machine. Right. So that's

the bet that we are making. And so having world class talent with world class technology, we believe that we're going to be in position to dominate. Right. And so ultimately, because we're big does not mean that we're going to be clunky and slow. We think we're going to be superinformed and uh and have the ability to respond to forces early on. Right, So these disruptive forces that tend to captivate us. And so the thing that I would say, you're Barry, that has has been a key part of

our strategy of the last couple of years. Is that there was a time where if you want to do wealth management with Morgan Stanley, going back to our origins in the Wealth Business Acting seventy seven, we only dealt with what we're you know, my business right the ultra high networks. So PWM was the only offering, and I'd like to use the analogy of BMW. You know, BMW makes the ultimate driving machine. There was a time when

more instantly only sold seven series. But our strategies evolved over the last number of years and where you know, whether it's our digit if you want to engage with us digital in a digital way only, we've got you know, a Globo platform. If you want access to a person but you know, don't necessarily need a dedicated financial advisor, we've got a virtual advisor offering. And then obviously if you want to engage with us you know via one of our world class teams that that's an area that

we've always been specialized in that space. So we now sell three series, we sell five series, and we also sell seven series, and so at the heart of in terms of meeting clients where they are, you know, whether it's you know, direct to client Obviously, the e Trade acquisition, which you know about, is something that we think is going to be a real competitive advantage for us, not just in terms of just the DTC, but just the

technology that they're going to bring to bear. I mean, there's been this broader workplace strategy, like we think that that's going to be the next frontier of winning clients, if you will, is going to companies and sitting down with chief human resource officers and helping them grapple with you know, one of the great stressors that their employees have,

and that's obviously their financial wellness. And so so it's just comprehensives three sixties strategy that we have that we think it's going to help us be um I met winner not just in current state but future state. Well, well, I certainly do love a good car reference when we're referring to financial I know I only have you for a few more minutes. So before we let you go, let's jump to our speed rounds and our favorite five questions that we ask all of our guests. Let's jump

right into it. Tell us what you're streaming these days. Give us your favorite either Netflix or Amazon or any podcast you might be listening to what What's Key? Can you entertained during lockdown? Yeah? Sure, when my wife and I can take control of our television and we're not watching Frozen two or Laddin. You know that our our girls love to watch. I'd say it's a couple of things. Number one being a Chicago kid. Of course, the Last Dance, you know, the the Jordan era amazing, you know now

the second you want to go dark? Ozarks is definitely a show that we'll keep you in. Pretty good suspense Billions. I don't think it's as popular as it was, but I'm still very much, you know, watching Billions. There's a new show that that my wife turned me on too, and actually Andy sapristein who runs a business, have been talking about money. Heist is another Netflix gym that I'm just starting to get into. And then lastly, my wife and I we have one of our girls is artistic,

beautiful daughter Jaden. And there's a show on Netflix that we love called a Typical. So so those are the those are the shows that that jump out at me when I think about, you know, extreming diet. I'm familiar with just about everything you you listed. Both my nephew who was on a bond trading desk, and my sister are huge advocate of money. Hei, It's in our que and we're definitely gonna get to that. Tell us about your early mentors who helped shape your career from high

school to college to professionally. Yeah, whatever I think about mentorship, I always have to start very a little earlier than that. Like I always have to give you props to my uncle's, my older brother. I mean, they were they were the folks who the early early extremely raw you know Mandel. They played a huge role in that, and and then surviving the streets of Chicago. You know, this wouldn't be possible if it wasn't for that. But then you start

to get into a professional context. There was a guy named John Whalen who hired me at Morigan Stanley. You know, again as high school kid who showed up to interview in a gold suit, you know, in a black shirt, knew nothing about the BA is this The guy took a chance on me, so I'll be be forever grateful to him. And then there's a a guy by the name of Kevin Morano who I worked for I mentioned and fixed in town and he's the guy who gave me my first leadership position, and he remains a close

mentor you know, confidant to this day. And again, I I take leadership very seriously, and and he was the guy who served as my early example. And then there's a host of folks around Morden Stanley today that that obviously continue to invest the time and effort and basically serving as my sort of personal board of advisors as rich to my career. So I've been I've been incredibly fortunate. What are some of your favorite books? What are you reading currently? Yeah, so I'm a I'm an avid reader,

fairly diverse mix of books. One over the last couple of months that have resonated with me is Can't Hurt Me by David Goggins. If you want to, you know, sort of make sure you you if you want to put yourself where you want to go beyond uh, you're what you think you're capable of doing. I would, I would strongly implore your listeners to read Can't Hurt Me.

You know what you do is who you are by being Horowitz like a fascinating read that's largely about about largely about culture, talking to Strangers from my favorite author, Malcolm Gladwell. It's something that I've read fairly recently Becoming by Michelle Obama, again a fellow Chicagoan and obviously former First Lady. It was a great read. And then most recently Right of a Lifetime by Bob Eger. Fascinating story.

I mean, he's you know, dare I say, like Bob, you know, I've been at one firm my entire career, and yess, mergers and acquisitions along the way. But when you hear Bob's story and how he literally started at the bottom of the company and obviously you got to the point of being one of Disney's most renowned and memor mobile CEOs. And it's just a fascinating story. And he goes into again as the mergers in the acquisitions took place, you know what the implications was for him personally.

Just an incredible, incredible person in story. And so so those are the book that comes to mind from me there. What sort of advice would you give to a recent college graduate who was interested in a career in wealth management? So first, I would say it's important for young people generally to understand that careers are not linear as you and I both know, sir, it's their securities journeys and my career has definitely been an example of that. So

that's one. The second thing I sort of put in this category of of what I call the Big three high degree of self confidence, right, the the ability to manage your insecurities. We all have them, right, They prop up all the time, and I just think it's it's incredibly important to to be able to and your insecurities

over time. And then lastly, which is probably most important for young people, impulse control, the ability to control, you know, your impulses and just not make career decisions based on emotions or snap decisions or what have you. And that's something that you see that's fairly common with young people. What do you know about the world of wealth management investing today that you wish you knew years ago or

so when you were first getting started. You know, having the vision of is in hindsight is is a wonderful thing, and I wish I wish we we had it more real time. If there's one thing I would simply say, and I'm being cute here, partner, is I would have gone long rates thirty years ago and if I had if I had, if I had done that idea a

fairly wealthy individual. In all seriousness, I think that the one we have come to learn and appreciate its business and history proves this time and time again is you know, having a well thought out plan and sticking to that plan through good markets and bad markets, tends to be

the thing that over time tends to win. The day that you're trying to be this active and aggressive investor that's going in and out of markets, trying to time just being has humbled humbled many So I just to simply say, you know, financial planning, which is clearly a thing today, is something that essentially I should have. I wish it had been codified, you know, thirty years ago because it's that powerful. Thank you, Mandel Crawley for being

so generous with your time. We have been speaking with Mandel Crawley, head of the Private Wealth Management Group at Morgan Stanley. If you enjoy this conversation, well, be sure and check out any of the previous three hundred and fifties such discussions we've had over the past six years. You can find that wherever your Finder podcasts are sold Apple, iTunes, Stitcher, Spotify, We love your comments, feedback, in suggestions. Write to us at m IB podcast at Bloomberg dot net. Check out

my weekly column on Bloomberg dot com slash Opinion. Sign up for our daily reads at Ridholtz dot com. Give us a review at Apple iTunes. Follow me on Twitter at rid Halts. I would be remiss if I did not thank the crack team that helps us put together these conversations each week. Reggie Bazil is our audio engineer. Michael Boyle is my producer slash booker. Michael Batnick is my head of research. A tick of Val Brond is

our project manager. I'm Barry Ridholts. You've been listening to Master Some Business on Bloomberg Radio.