Transcript: Mandell Crawley



The transcript from this week’s, MiB: Mandell Crawley, Morgan Stanley, Private Wealth, is below.

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ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

BARRY RITHOLTZ, MASTERS IN BUSINESS HOST: This week on the podcast I have a special guest. His name is Mandell Crawley. He is the Head of 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 Mandell Crawley.

ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

RITHOLTZ: My special guest today is Mandell Crawley. He is the Head of Private Wealth Management at Morgan Stanley along with wearing a number of other hats. He has an MBA from Fordham University and has spent his entire career at Morgan Stanley. Mandell Crawley, welcome to the Bloomberg.

MANDELL CRAWLEY, MORGAN STANLEY HEAD OF PRIVATE WEALTH MANAGEMENT: I appreciate it. It is really good to be here with you. Thanks for having me on.

RITHOLTZ: My pleasure. So I mentioned you spent your whole career at Morgan. Tell us about how you first got started in the financial services industry. What did you imagine your career would be like?

CRAWLEY: Yes, yes. Thanks, Barry. I have to tell you my path to finance is unorthodox to say the least. I started as a high school intern at one of Morgan Stanley’s private center (ph) firms at Dean Witter, and you know, at the time it was a work study commitment making $5 an hour and about 20 hours a week. I had zero interest in finance. I mean, 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 sales 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.

RITHOLTZ: So how long were you an intern for, and what eventually led you to working on a bond desk?

CRAWLEY: Yes, so the internship was supporting about 15 folks. It was a muni – municipal bond, public finance, sales and trading effort. And initially that internship was only supposed to last a year, and the guy who ran the desk essentially had this 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’d obviously have some relatively inexpensive labor, doing some relatively administrative things including running errands, supporting your sales people and your traders. And that had basically been the model for 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 brothers and I, we lost our parents relatively early. And (inaudible) life where I needed to work, right? So in addition to getting my education, (inaudible) wasn’t particularly optional around if I was going to work or not.

So long story short, being aware of my personal situation, when my internship ended I was given the opportunity to extend that, and when it came time to go into undergrad, I had the opportunity to work full-time and then I end up going to undergrad full-time in the evening.

Again, it’s a nontraditional path, but it’s one that truly proved to be life changing in so many ways.

RITHOLTZ: 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.

CRAWLEY: Yes. So I spent 14-15 years in the sales and trading base so, as I mentioned, started out in the muni area, moved over to credit and largely I wore a number of different hats in the sales and distribution arena. And I had a healthy measure of success and to the point there. it is definitely far from intuitive going from being a bond salesman to chief marketing officer. And I’d attribute that to a couple of things.

One, being at an organization, as you mentioned at the beginning, 28 years at a 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 — if a firm’s not growing essentially the optionality of the employees is impaired. So Morgan Stanley happens to be in growth mode.

Second, and this is more I think specific and maybe this gets into a little bit of how I think about talent, in over simplified way you’ve got specialists, right, and then you’ve got what I like to call natural athletes right, with some agility. And I’ve always sort of liked to think of myself as somebody who’s got some versatility, who’s got the dexterity to do a number of different things if given the opportunity.

And so the culture of Morgan Stanley, as bizarre as it may 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 still (ph) decided that I still was the right guy for the opportunity. But the firm has a history of moving talent across the ecosystem.

A quick example of that is there’s a guy who ran our fixed income business globally who is now the chief technology officer who also runs operations and has responsibility for the overall resiliency of the firm. And so if you look at some of the objectives at Morgan Stanley, that is — it’s actually fairly common. More common than most people would think.

RITHOLTZ: 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.

CRAWLEY: Yes, like private wealth business is a business that I’ve long had a great deal of interest in. So when I was in sales and trading, in many respects, my core sort of market, if you will, my core clients were 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 counterparties, if you will, were, you know, private wealth advisors, and so that was sort of my early (inaudible), if you will, to that business.

And there was an individual who ran the business, you know, call it circa 2005-2006 who — who I’d always been impressed with and — and so, it was always an opportunity — when I was in the — in the chief marketing officer job one of the benefits of it, this was the first time I got an opportunity to sort of zoom out and — and see the full firm ecosystem. And I — I got a — an incredibly deep appreciation for the brand of Morgan Stanley, not just in the U.S. context but globally.

I also got an opportunity to appreciate how all of the different businesses within the firm, so from sales and trading, investment banking, prime brokerage, wealth management, investment management, how all those pieces fit together. And the one common denomination across each of those businesses is that private wealth essentially, you know, had a reason to be connected with each of them.

And so, the fascinating thing about the private wealth business, if I have to oversimplify to a single word is the complexity of it all. And so, it was that complexity that — that really had gotten my attention, and again, that level of curiosity that I had. And so, as I was in my third year as chief marketing officer of the firm, it was a role I was enjoying a great deal, the opportunity presented itself.

And as I mentioned earlier, it was one that I knew that I was going to go after and fortunately the firm 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.

RITHOLTZ: Quite interesting. So, let’s talk a little 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 with the diversity requirements we see in most major companies?

CRAWLEY: Yes, Barry, I’m — I’m glad you asked me the question. Obviously, there’s a — there’s a multi-faceted — I’ll start with at a macro level, that this is a — a structural challenge, the issue — but I know we’re specifically talking about diversity, but you start thinking about, you know, what I’ll call the broader social injustices that are prevalent.

Thankfully I would argue that they’re very present across our entire social ecosystem, so this is not something that’s idiosyncratic to wealth management, whether it’s the education, assisted housing, the list could go — could go on and on.

I would 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 know, people of color and in some instances women.

And again, this is — to be clear, this is a more historical context, you know, which has contributed to why the results that we have today in terms of the representation 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 decades.

You know, for the last 30 years there’s been plenty of podium fodder around the — the need to do it, by both on a 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 organizations is starting to improve, but we’ve got a long way to go.

I think, you know, our history of hiring talent from within, through what I simply just describe as, you know, common or said more specifically majority networks, whether it’s college alma maters, country clubs, you know, members of lacrosse teams and things of that nature, because in the final analysis, you know, if I were to again distill 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 at a macro level, Barry, that’s kind of how I think about 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, raising money is hard, especially when you are 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 13 percent of the population but we hold less than 3 percent of the wealth, right?

So, in the spirit of trying to build and scale a business you have got to be able to acquire clients that don’t look like you. And that’s — in some respects that defies many of the long held sort of beliefs if you will around a lot of investors, a lot of clients, a lot of LPs.

They like to do business with people who look like them or 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, Barry, is in relation to women. I think that in our business I think that we’ll call it 20 percent of our advisors are women and that’s — this is one that just 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 women in many respects have those attributes in spades. But I think many of them have had to make very difficult life decisions around obviously raising their families and stepping away from the business.

I think that there has been a tendency to place women into support roles and service functions and what have you versus seeing them as having the ability to lead their own wealth practices. Now, again 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.

RITHOLTZ: I have so many questions to throw at you based on what you said. First, is there a cause to optimistic that we’re seeing a sea change take place? I’ve watched this cycle repeatedly over the past let’s call it 30 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, use policing as an example. I think the average suburban mom was shocked to see the reaction of police against peaceful protestors over the past couple of months.

Maybe this is the little bubble that I exist in but it feels like there is 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?

CRAWLEY: Yes. Look, I share your optimism, Barry. I do think this time is different, and I’m under no false illusion that we’re going to get to perfect on the other side of this, but I do think we’ve got a real shot at better. And the reason I feel that way is a couple if things.

One I think just given the confluence of events that have taken place in 2020 I mean obviously the COVID pandemic has forced us all to — into a completely different 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 and the narrative around the tragedy around Breonna Taylor or Ahmaud Arbery, the fact that we’re all home in a world where, you know, the competition for mindshare is as great as 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 one point.

The other thing more importantly that actually has me hopeful is just the young people. When you look at the demographics of the protestors, it’s not just, you know, black Americans that are leaning in. I think it’s a tremendous amount of representation from our majority colleagues. And so, that allyship I think is at a level that, you know, particularly with younger generations it’s a level that we’ve never seen before, and frankly I think it is 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. Change tends to be hard. It always moves slower than you ultimately want it to, and I think folks get the idea that it’s not about these false binary choices of, OK, I support, you know, Black Lives Matter versus the police, right? That’s an oversimplification of the issue. You can actually be supportive of both, and again I think the majority of people get that.

RITHOLTZ: Well, it certainly is the role of youth to agitate for change. That’s been their historical role. If what we are both feeling that this seems to be a pivot point, that it is different this time, what’s a reasonable guess for how low it’ll be before let’s take financial services. How long will it be before our industry looks a little bit more like America looks?

CRAWLEY: Yes. Yes, look. I think it’s going back to some of my earlier comments around how we got here. It took generations 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 1960 he made the declaration that we’re going to put a man on the moon, and that didn’t happen until 1969, 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, Barry, 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 the individual investor, the individual client hasn’t quite got there yet, but I’m encouraged 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 a great deal of transparency and the appropriate levels of accountability to ensure we get to a better place, and I’m hopeful we will.

RITHOLTZ: 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 Kaepernick. 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 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.


RITHOLTZ: 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 going to play a surprisingly outsized role in fostering change?

CRAWLEY: Yes, it’s a great question. Look, I think the — throughout this — our country’s history, I think grassroots has always been at the center and dare is say the catalyst 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 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 — of there was an important time where the — the paradigm of the philosophy was the — the role of corporation is singular, right. And that is to produce returns for shareholders.

And you fast forward to — I’ll just highlight the — the business roundtable, right, that’s made up of, you know, prominent CEOs who have come out publically and said that the role of the corporation is beyond just, you know, shareholders. It’s our employees, it’s the communities in which we work and live.

And I think you’re starting to see corporations, and you gave a couple of the great examples, you know, lean In to some of these social issues and I have personally been encouraged by some of the — the public, you know, not just the statements but the public actions that we’ve seen in the wake of, again, the George Floyd tragedy, which again, gives me some hope that we can get to a 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, you know — CEOs that are running companies, and I mean, you and I both know we only have four African-Americans who are leading companies within a Fortune 500, but it’s also got to be folks within corporations that are running businesses, sitting on operating committees, management committees, et cetera, et cetera.

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 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.

RITHOLTZ: Yes, you know, let — I know I said last point, but I’m fascinated by the topic. The — one more last 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 at a school and pushed the issue forward almost by accident, the rest of the country was surprisingly ready for those changes.

I think it had slowly been morphing over time, and — and as you said earlier, it was the young people where driving a lot of those changes before it became really just, you know, the standards in 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 — 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?

CRAWLEY: Yes, I think it — 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 is far more controllable and candidly I think you’ll see much greater improvement sooner versus later as, you know (ph), start with the analysts and the associates, right?

So, they often use funnel analogy, right, in terms of bringing people into the industry and how we recruit kids off of college campuses. I think you’re already starting to see that widen, where the industry used to live, as you and I both know, used to live at a certain — almost a fixed level of colleges and universities because there was a view that that’s where the best talent resided.

I think you’re already starting to see corporations or institutions get much more sophisticated about 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 country, but I think you’ll maybe even see organizations over index (ph).

And so then the key then becomes 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, we often use mentor programs but I think one of the areas that I’d like to see corporate America get better at as it relates to diverse talent is on the sponsorship side.

And I think to the degree we can do that more effectively I think we’ll see a better — much better outcomes over time. But the thing that will take time is, again, representation on our boards, you have — whether it’s government action like California where it’s starting to — where they’re starting to mandate it. (Inaudible) the number of women on board, which I think, again, that is a positive outcome. But as it relates to the number of CEOs and folks running businesses, I think that that will take some time.

RITHOLTZ: Yes, 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 like the fact that you’re 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?

CRAWLEY: Yes. No, it’s a great question, Barry. And so the portfolio — PWM has become a bit of a portfolio at Morgan Stanley. Obviously you mentioned a number of the specialty businesses that are within. I’d say with PWM, the international wealth business, and the sports and entertainment business are very, very — there’s some common themes that cut across all three of them. And that common thread is ultra-high-net-worth individuals, families, foundations, and essentially the distinction becomes, in the case of the international business, jurisdiction, right?

So jurisdiction where the client actually lives. And at Morgan Stanley we’ve got a fairly robust offshore business but all of the advisors are based here in the U.S. 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 as you go around the world.

So, that was that logic. And then the sports and entertainment business 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 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 just pulling those businesses together just made a good deal of sense for us and then institutional client coverage business kind of harkens back to my old age of being in the sell and trading business it is largely — it’s equity fixed income focused along institutional clients.

So that’s a little bit different but there are pockets of overlap especially when you’re talking about the family office.

RITHOLTZ: So, let’s talk a little bit about some of the bigger themes we’ve seen in the wealth management business. One has been a bit of a shift from larger wire houses to independent RIAs. What are you guys doing to attract and retain talents in the face of industry wide — it’s been a pretty broad trend.

CRAWLEY: Yes. It’s interesting and I see a lot of reporting on the shift from the defection from the wire house to the independent channel. And it’s interesting as we have this conversation, Barry, at Morgan Stanley we’re having our best net recruiting year ever.

And so I’ll say it simply it just hasn’t been our reality and I don’t say that out of arrogance or surely not hubris 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 85 years in the making, and I like to believe that that’s real currency for advisors out in the marketplace who 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 that I trust would resonate with you is entrepreneurial culture, right? Our advisors have a tremendous amount of flexibility to run the business.

Of course there is — we have our control partners to make sure that everything we do is in the spirit 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 strong local leadership in our branches across the country, our leadership — senior leadership team which I’m a part of that. But (inaudible) runs the field (inaudible) who runs a broader business; I mean we try to be fairly proximate to our advisors, right, so they feel like it’s truly a real partnership.

But I’d say when you combine a 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 for us. 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.

RITHOLTZ: Quite fascinating. Let’s talk a little bit about what clients are looking for these days. There has been a huge shift in in-flows over the past 20 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 volatile environment?

CRAWLEY: Yes. 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 mega trend towards passive is something that’s impacted the entire industry.

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 want to partake and partner with, if you will, invest with, you know, active managers that out in the marketplace.

So yes, beta has definitely, you know, engulfed the industry, but I think when you get into periods like frankly we’ve experienced this year, you know, having those managers who’ve demonstrated a consistent sort of track record of delivering said alpha for clients, you know, frankly, you know, I think they’re going to continue to win in the marketplace. So, yes, we’ve got a lot of clients who are, you know, doing passive investing, et cetera, but they’re absolutely complimenting that with the best of the best managers out there.

RITHOLTZ: Makes sense. What about ESG investing, environment, 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 mindshare, 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 all that much. What are you seeing in that space?

CRAWLEY: Yes, look I – at Morgan Stanley we’ve been – we’ve been focused on what I’ll just call categorically the sustainability effort for some time, and we established an institute of sustainability about 10 years ago. Our CEO chairs it. Audrey Choi, our Chief Sustainability Officer, has been leaning in on this topic for some time. And this is almost, Barry, like the diversity conversation that we had earlier, and that’s – there’s been a lot of podium fodder around ESG and sustainability for decades, but I would say over the last four, five years you’re really starting to see change take place where, again, I think the thesis around ESG I think that it’s fairly compelling.

And I think you’re starting to see – and I’ll just speak 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 talk about it. But when you have a firm like BlackRock, which obviously is the biggest player in the asset management space and Larry Fink has obviously devoted a tremendous amount of his platform to the topic, I think that’s where you’re going to start to see a bit of an acceleration.

So, the product proliferation is starting to happen. To your point, the capital flows, you know, are probably not as robust as some other areas, but I think it’s coming. I think it’s inevitable in my own personal view.

RITHOLTZ: Yes. No, 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-19 pandemic. What sort of unique challenges have been thrown at you running the private wealth management at Morgan Stanley due to the lockdown, the pandemic, et cetera? How is this impacting how you guys run your business and deal with clients?

CRAWLEY: Yes, I mean, it’s – you know, if you go back to, you know, the first, second week of March and if you had said to me that the firm or the business was going to go completely virtual and everyone’s going to be working from home, my reaction to that would have been one of great concern. Fast forward to where we are, and today we still have over 90 percent of 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 plant is doing extraordinarily well. I could not 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, the firm obviously announced earnings a couple of weeks ago, the firm, not just when in wealth management, but just across the entire plant, the firm is performing extraordinarily well.

Now, obviously underneath those headlines, I mean there’s a lot of complexity. You know, we’ve obviously had to go through the heartbreak like, you know, frankly all the organizations where you lost people, we’ve lost a few employees, we’ve had employees who have lost family members as a result of COVID.

But, even when you have folks who have 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, you know, mental health is — is a topic that we’re sending a good deal of time on.

So — so while at a macro level really pleased with how we’ve been able to perform clearly is given how unnatural this is, there are some — some people related issues that we remain very, very concerned about.

RITHOLTZ: Yes, no, 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 fast forward — I’m going to make up a number, 2022, there’s a vaccine, there’s herd immunity, we’re going out to shows and eating in restaurants indoors 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?

CRAWLEY: Well, you know, Barry, it’s not even you when you were talking about 2022 and you were, you know, hit on some of the highlights, you know, we’re out at restaurants, we’re going to shows again, I will just tell you, partner, I cannot wait for that happen. Like, a big smile came on my face because I miss all of that so much.

And the way we think about it at Morgan 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 when we’re on the other side of this goes back to the old world.

I think it’s not going to be this binary of do I work in the office or do I 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 or workplace strategy going forward. But, I also think, 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 DNA, if you will.

So, I don’t anticipate any material downshift in our real estate stack to be fair, but can you maintain your office space presence, but also make sure your employees, where and where appropriate, have the flexibility to work remotely when necessary, absolutely.

And so, that’s where I think we’ll land, but I also will highlight, you know, another, you know, big positive Barry, you know, of — of the virtual world. Number one, our clients, we’ve seen just a massive uptake in what I would just simply call the digitization of our wealth management, you know, business and the fact that clients are now comfortable with, you know, 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 our philanthropy specialists where they’re jumping on planes all the time and trying to go meet with advisors and go meet with clients, we’re going to 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 there’s going to be a lot of positive things from the work from home world that will untimely make its way to the old world if you will that will make for a much better work environment for advisors, for clients, et cetera.

RITHOLTZ: Yes, 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 has it decoupled so totally from the economy? What are you hearing from clients?

CRAWLEY: Yes. You know, that’s definitely one of the main, you know, themes. The dichotomy of what’s happening in the markets, right, where we are literally sitting back at historic highs from, you know, the underlying economy and we know where we are with unemployment and the state of small business, et cetera across the country. So we see a couple things.

Number one, you know, cash positions have absolutely jumped. I think our cash position within private wealth is up 50 percent from where it was just a year ago, and I think you can think about that –



CRAWLEY: — in both defensive and offensive way. 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 a macro level Morgan Stanley, our research team has been calling for a V-shaped recovery, but even within that thesis, I don’t – I don’t know if we would necessarily envision the markets being, you know, have snapped back as quick as they have. And so, I do think that there’s a good deal of caution on the part of many of our clients. 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 raise cash because they want to actually, you know, have powder dry to take advantage of some of the massive dislocations that we’ve seen in the market. And so, some of that will take place obviously in the private equity market. Some of that’ll take place obviously in growth equity or venture, but some of that is just, you know, taking advantage of dislocations that exist in what I’ll just simply call our regular way, you know, sort of equity business. So you’ve got that style happening, so that’s one thing.

The other thing that we’re seeing on behalf of clients is – I mentioned this earlier – the estate planning engagement is just on fire, right? Clients, you know, whether it’s around taxes and maybe that has something to do with the fact that we’re 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, and they are as engaged and maybe, again, maybe because we’re all home now there is engagement focused on some of these more emotional things than I’ve seen surely since I’ve been running the business.

So look at GRATs as an example just given where – obviously where interest rates are, this is one example, so that’s the second thing. And then 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 our ultra-high net-worth clients are barrowing at a level that is far faster or much faster than any of our other segments.

And so, the demand or the appetite for capital is definitely very much alive and well.

RITHOLTZ: Yes, it wouldn’t surprise me. Why sell an asset if you don’t want to when cash is practically free. I think what was it two weeks ago mortgage rates hit their lowest level ever?


RITHOLTZ: That’s 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.


RITHOLTZ: But what sort of valuation pushback are you getting these days?

CRAWLEY: Yes, I think that’s a debate that’s playing out and that’s the beauty of markets as you and I both know. There’s a (inaudible) and there’s an ask (ph) but you got some clients.

I mean look at what we’re seeing on the metals front. Look at what’s happening with gold, right? You 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 over school of thought, right, that’s the long held true — I was going to say truth but the long held view of don’t bite the Fed and just do extraordinary amount of stimulus that we’ve seen obviously from central banks around the world and then obviously from a fiscal policy perspective.

Obviously Congress and the White House are in the throes of debating the next round of the next leg. But when you take a step back as you and I both know being 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 irrespective of the underlying fundamentals are we at a place now where there’s so much money floating around our system that markets will continue to — their perpetual move high. But that’s a debate that’s playing out but you got some clients who are basically taking risk off the table leveraging structure products.

You got some folks who again are putting a ton of money in gold and other precious metal instruments because again they think that there’s going to be this unleashing of inflation at some point and the market’s going to go into some significant downturn but that’s the life we’ve chosen, partner, as you know.

RITHOLTZ: 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 2016 and right after the election. It’s been a little quieter this time around from what I’m hearing. I’m curious ad to what you guys are hearing.

CRAWLEY: I think it’s — yes, because depends if you start with we’re on the political spectrum you sit. I mean, ultimately it’s been relatively quiet, and I think that’s true even with institutional investors.

But now we’re getting close, right? And surely when we get on the other side of Labor Day I think that the election will clearly dominate the markets and will dominate mindshare for reasons that–

RITHOLTZ: And let me just — let me just clarify–

CRAWLEY: — (inaudible).

RITHOLTZ: Mandell, let me just — I’m sorry to interrupt.


RITHOLTZ: Let me just clarify, I don’t mean what are people asking about who you think is going to win or what’s going to happen in the Senate–


RITHOLTZ: — or anything like that. I mean specifically–


RITHOLTZ: — hey, what happens if there’s a major shift? If there’s a blue wave–

CRAWLEY: That’s right.

RITHOLTZ: — and the Senate flips and Biden wins, what does that mean for my taxes? What does that mean for my portfolio?

CRAWLEY: That’s right. That’s right. Yes — no, I think that that’s exactly where I was going. I think there’s — you and I both know this, if you look at the history of — irrespective of who’s in the White House and almost in some respects irrespective of who’s dominating Congress that the performance in the markets, right, 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, just simply stated, asset class repositioning where 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 about estate planning where folks are becoming increasingly sensitive to tax policy, right?

So that’s one where it’s pretty intuitive to me if one is assuming it’s — let’s call it a Biden presidency, and assuming that taxes are going higher, we have started to see, again, still relatively early days, families start to get a little bit more concerned and focused on that.

RITHOLTZ: Makes sense. And our last question about the industry. We see some of the real tech driven startups, apps like Robinhoods 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?

CRAWLEY: Yes, it’s — I’m really glad you ask me this question, Barry, because I think the — there’s this assumption, right, that the incumbent terms are at risk of being disrupted. And, clearly, whether it’s Betterment or Robinhood and there’s some great, what I would call, digital natives that have come to market 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 called them, is — I think that it’s forced incumbents, our firm included, right, to turbocharge this shift from a paper print fax 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 I’m going to be direct about this, I’d say that folks assume we’re going to be disruptive 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 disruptor 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 clonky and slow. We think we’re going to be super informed 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, Barry, that has been a keep part of our strategy over the last couple of years is that there was a time where, if you wanted to do wealth management with Morgan Stanley going back to our origins in the wealth business back in 1977, we only dealt with what — my business, right, the ultra-high-net-worths, so PWM was the only offering.

And I like to use the analogy of BMW. You know BMW makes the ultimate driving machine. There was a time where Morgan Stanley only sold 7 Series. But our strategy has evolved over the last number of years and where — whether it’s our — if you want to engage with us digital — in a digital way only, we’ve got a robo platform. If you want, you know, access to a person but 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 be it one of our world class teams, that’s an area that we’ve always been specialized in that space. So we now sell 3 Series, we sell 5 Series, and we also sell 7 Series.

And so, at the heart of in terms of meeting clients where they are, you know, whether it’s direct to client, obviously the E-Trade acquisition which you know about is something that we think –



CRAWLEY: — is going to be a real competitive advantage for us not just in terms of just the BTC but just the technology that they’re going to bring to bear. And then 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 human resource officers and helping them grapple with one of the great stressors that their employees have, and that’s obviously their financial wellness. And so, it’s this comprehensive, 360 strategy that we have that we think is going to help us be a net winner not just in current state but future state.

RITHOLTZ: Well, I certainly do love a good car reference when we’re referring to financial management. I know I only have you for a few more minutes, so before we let you go let’s just to our speed rounds and our –



RITHOLTZ: — favorite five questions that we ask all of our guests. So let’s jump right into it. Tell us what you’re streaming these days. Give us your favorite either Netflix or Amazon or any podcasts you might be listening to. What’s keeping you entertained during lockdown?

CRAWLEY: Yes, sure. When my wife and I can take control of our television, and we’re not watching Frozen 2 or Aladdin, you know, that our girls love to watch, I’d say it’s a couple things. Number one, being a Chicago kid of course The Last Dance. You know, the Chicago –


RITHOLTZ: Amazing, right? Just amazing.

CRAWLEY: — Bulls run during the Jordan era. Amazing. You know, it’s now the second you want to go dark. Ozarks is definitely a show that will keep you in pretty good suspense. You know, Billions I don’t think is as popular as it was, but I’m still very much watching Billions.

There’s a new show that my wife turned me on to and actually Andy Saperstein who runs our business has been talking about Money Heist is another Netflix gem that I’m just starting to get into. And then lastly my wife and I we have – one of our girls is autistic. Our beautiful daughter Jayden (ph), and there’s a show on Netflix that we love called Atypical. So those are the – those are the shows that jump out to me when I think about, you know, my streaming diet.

RITHOLTZ: I’m familiar with just about everything you listed. Both my nephew, who is on a bond trading desk, and my sister are huge advocates of Money Heist. It’s in our queue, and we’re definitely going to get to that.


RITHOLTZ: Tell us about your early mentors. Who helped shape your career from high school to college to professionally?

CRAWLEY: Yes, whenever I think about mentorship I always have to start, Barry, a little earlier than that. I got – I always have to give props to my uncles and my older brother. I mean, they were – they were the folks who early, early extremely raw Mandell, they played a huge role in that, and surviving the streets of Chicago this wouldn’t be possible if it wasn’t for that.

But then when you start to get into – in the professional context, there’s a guy by the name of John Whelan (ph) who hired me at Morgan Stanley, you know, again this high school kid who showed up to interview in a gold suit and a black shirt, knew nothing about the business, and the guy took a chance on me.

So I’ll be forever grateful to him. And then there’s a guy by the name of Kevin Morano who I worked for I mentioned in fixed income, and he was the guy who gave me my first leadership position, and he remains a close mentor, confidant to this day, and again, I take leadership very seriously and he was the guy who served as my early example. And there’s a host of folks around Morgan Stanley today that obviously continue to invest the time and effort and — and basically servicing as my sort of personal board of advisors as it relates to my career. So, I’ve been — I’ve been incredibly fortunate.

RITHOLTZ: What are some of your favorite books? What are you reading currently?

CRAWLEY: Yes, so I’m an — I’m an avid reader, fairly diverse mix of — of books. One over the last couple of months that have resonated with me is — is “Can’t Hurt Me,” by David Goggins. If you want to, you know, sort of make sure you — you — you — if you want to put yourself where you want to go beyond your — what you think you’re capable of doing, I would — I would strongly implore you’re listeners to — to read “Can’t Hurt Me.”

You know, “What You Do With Who You Are” by Ben Horowitz was a fascinating read. That’s largely about — about — largely about culture. “Talking to Strangers” from my favorite author Malcolm Gladwell, is something that I’ve read fairly recently. “Becoming” by Michele Obama, again, a fellow Chicagoan and obviously former First Lady, was a great read.

And then most recently “Ride of a Lifetime” by Bob Iger. 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 yes there’s 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 got the point of — of being one of Disney’s most renowned and memorable CEOs and it’s just a fascinating and he goes into, again, as the mergers and the acquisitions take place, you know, what the implications were for him personally, just an incredible, incredible, you know, person and story. And so, those are the books that come to mind for me Barry.

RITHOLTZ: What sort of advice would you give to a recent college graduate who is interested in a career in wealth management?

CRAWLEY: Yes, so first I would say, it’s important for young people generally to just understand their careers are not linear. As you an I both know, sir, it’s — there’s securities (ph) journeys and my career has definitely been an example of that. So, that’s one.

The second thing I — I sort of put in this category of — of — of what I call the big three. High degree of self-confidence, right, the ability to manage your insecurities, we all have them, right? They pop up all the time and I just think it’s — it’s incredibly important to be able to manage your insecurities over time.

And then lastly, which his probably most important for young people, impulse control, right. The ability to control, you know, your impulses and just not make career decisions based on emotions or a snap decision or what have you. And that’s something that you see that’s fairly common with young people.

RITHOLTZ: What do you know about the world of wealth management investing today that you wish you knew 20, 25 years ago or so when you were first getting started?

CRAWLEY: You know, having the vision of — of, you know, 2020 is in hindsight is — is a wonderful thing and I wish — I wish we — we had it more real-time. If there is one thing I would simply say, and I’m being cute here, partner, is — is I would have gone long rates 30 years ago. And if I had done that I’d be a fairly wealthy individual.

And in all seriousness, I think that what we have come to learn and appreciate, mix business and history proves both 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 know, trying to be this active and aggressive investor that’s going in and out of markets trying to time this being his humbled — humbled me. So, I just would simply say, you know, financial planning, which is clearly a thing today, is something that essentially — it should have — it wish it had been codified 30 years ago because it’s that powerful.

RITHOLTZ: Thank you, Mandell Crawley, for being so generous with your time. We have been speaking with Mandell Crawley, Head of the Private Wealth Management Group at Morgan Stanley. If you enjoyed this conversation, well because sure and check out any of the previous 350 such discussions we’ve had over the past six years. You can find that wherever your finer podcasts are sold – Apple iTunes, Stitcher, Spotify. We love your comments, feedback, and suggestions.

Write to us at Check out my weekly column on Sign up for our daily reads at Give us a review at Apple iTunes. Follow me on Twitter @ritholtz.

I would be remiss if I did not thank the crack team that helps us put together these conversations each week. Reggie Bazil (ph) is our audio engineer. Michael Boyle (ph) is my producer/booker. Michael Batnik (ph) is my head of research. Atika Valvrun (ph) is our project manager. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.


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