What It Takes to Run a Successful Multigenerational Team

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Hello and thank you for joining us. I'm Greg Bartolis, editor-in-chief of Barron's Wealth and Asset Management Group. I'm joined by Scott Wilson, managing director at Morgan Stanley Private Wealth Management, and Crystal Ho, executive director. Scott is a Barron's Hall of Fame advisor, and Crystal was ranked by Barron's last year as a top 100 women's financial advisor. Now, the context for today is as follows. If you go to barrons.com you can find a new in-depth intelligence report devoted to succession planning, and it covers pretty much all the ins and outs of every stage, including how to choose between an internal or external succession plan and the best way to structure a deal. However, instead of rehashing what's in the report, you can read the report yourself, and you should, but we thought it would be more helpful to complement what's in the report by speaking firsthand with people who know exactly what it's like to set up and run a highly successful multigenerational team. Scott, Crystal, welcome.

Thank you, Greg.

Thanks for having us.

Thank you so much. Thank you. Yeah, my pleasure. So, you know, on a high level, let's first let the viewers know, tell us about Atlas Group, a little about your firm, who, you know, who your clients are, what you do, etc.

Sure, I'll start out at a high level and Crystal, please jump in. So I started it at— in this business, the private wealth management group, in 2002, and that was after a 20-year career as an investment banker. Our team has developed a substantial client base. We now have roughly $9 billion in client assets with the firm. We're a team of 6 with roughly 125 clients. The typical asset size with us ranges from $20 to $100 million. We do have a couple of billionaires in the mix, which skews the, the overall asset base. And, you know, we— it's a very hands-on, service-intensive model. In addition to Crystal and I, who are equity holders and the primary advice givers, we have two analysts, very experienced people who are also client-facing and do a lot of the heavy lifting as well. Robin on our team is a 30-year veteran in the industry, and she's our chief administrative officer. And Sydney has really taking care of a lot of the administrative matters of the team. But let me just pause there. Crystal, you may want to talk a little bit about how, how we got together.

And sure, sure. So I was an art history major, which is obviously nothing in the finance world, but I ended up interning my senior year at what was then Seth Barney and joining Morgan Stanley Seth Barney in 2003. So I've been working with Scott next year for 20 years, and I started out as his administrative assistant and then as a consulting group analyst and then as an advisor. So I've been an advisor about 13 years, but we basically worked side by side together for almost 20 years.

Excellent. Now, you— your firm is a true multi-generational firm. I think there are a lot of firms that they may feign to be one or they may want to be one. I would really like to explore that fact. Was it a natural evolution? Was it the byproduct of a specific vision? How did it manifest itself? Where is it in its life cycle? All of these things. So many, many questions along those lines. So I guess tell me about that first, the genesis of your firm having that identity.

Yeah, I'll start out. I mean, it really was evolutionary. I mean, the, the, um, Crystal and I joining together was really at the instigation of our then branch manager. I, I had been with the firm for a year or a year and a half, and Crystal had joined with another team in our branch, and our manager basically looked at Crystal's capabilities and background and mine, and he said, hold on, you two should be working together. So he really put us together in that regard. We worked with a team over the first 7 or 8 years and then separated from them to start what is now our team. And that was in 2008, 2009, when there were a lot of drama in the market, but we obviously were able to create a very vibrant team. And Crystal, you may want to comment on sort of how the different members joined with us over that period.

Sure. So as Scott said, Greg, we, you know, we didn't intentionally say we need somebody from this Generation X Z or anything like that. Obviously, Scott and I are slightly different generations, but we've been working, you know, seamlessly together for, again, almost 20 years. And during that time period, as we were looking to add people to fill in gaps within our team, we would ask both externally and internally, and oftentimes it was the referral process that brought us to really talented team members. They just happened to be from different generations over that time period. So Robin Weintraub had been at the firm for a while and she was referred by somebody internally when we were looking for an analyst. Luke Rutledge, who's in his 20s, was referred by another wholesaler at West End who used to work with our team at Morgan Stanley. So You know, it's really been making sure that we use our friends, our colleagues to come to us, and they can give us really honest feedback of who they think is a good fit because they know what our team is like. They know our work ethic. So even if somebody's qualified on a piece of paper, the chemistry of how we get along and the sort of work ethic we have is really important for us to really merge the team and really be cohesive.

Okay. And you may have inadvertently partially answered part of my next question, which is you've done this long enough. Are there any necessary ingredients, would you say, to have a really effective multigenerational firm? And acknowledging every firm is different and there's no one-size-fits-all answer. But if you were to start one or advise someone who were to start one, what would be the 2 or 3 things that you would insist that they really should pursue?

Yeah, I would say the most critical element is, it's multidimensional, but it's really chemistry. And chemistry has a lot of elements to it, but it relates to work ethic, self-awareness, kindness, dedication to service, and also humility. And, you know, this is an industry where those things don't always appear all the time, but I think the team's attributes along those lines makes it very easy to service our clients and grow the business in a multigenerational way. So that's what I would say to that.

And I'm curious about the all-important chemistry. Is that usually or even always something that you immediately detect? I mean, you have a job interview or you have a cup of coffee, oftentimes within 5, 10, 15 minutes, you have a pretty strong sense of things. But have there ever been cases where maybe there wasn't chemistry, you hired someone, then later you realized it was there? And I ask that partly for people who in the interview process might be on the fence and not sure about the chemistry, or is that something that may reveal itself in a second or third interview, if you will?

I'll take a stab at that, and then Crystal, you can chime in. But our evolution to the belief system that I talked about came from the prior version of where we were, where chemistry was not great and it was more of a non-team approach, if you will. So, you know, our book is serviced by everyone on the team. We purposely try to have everyone engage with every client. We purposely try not to have silos. We don't have annual reviews where we, you know, take claims on, on who did what. If everyone rolls up their sleeves and is rowing in the same direction, everyone benefits. And so I think the way we've structured the business in that respect is good. I agree with you, Greg, that I don't think it takes long to figure out if someone falls into the categories that we were talking about. I don't want to say you can tell in 10 or 15 minutes, but you should certainly be able to tell in a couple of different conversations.

Yeah.

Yeah, I agree with Scott. I mean, I think it's really important to have to, you know, to want, you know, to like your team members as human beings as well, right? Because I mean, what we do is important, but in the end, we're not really, you know, curing cancer, but we are helping people in their lives. And You know, we have to see our colleagues on a daily basis, so it makes it much easier when you like them and you get along and you're kind to each other and it's a smile and it's a hello and, and when you're actually genuinely interested in their lives outside of the office. So, you know, I think that when you're making the effort to do that, everything else falls more, more naturally and easier. And I think that, you know, in regards to What, you know, at least in terms of our team, I think somebody that is constantly willing to learn, right? Curiosity, pushing themselves, and they're not just complacent about one thing. So I think all of us realize that we have so many ways to improve constantly and never to stay, you know, like just satisfied, right? So I think it's important to try to push yourself and to realize what you don't know because there's way more more things that we don't know than we do know, I think, and just in life.

Yeah, I would offer up one anecdote in terms of dedication, although there's lots of them, but Robin on our team works with some of our very largest clients in terms of making sure that securities get in the right place and, and, and things happen. And she was in the process of converting physical stock certificates into DTC, and this was, you know, in the billions of dollars, and it had to happen over a weekend, and it was the weekend of Hurricane Sandy, and Robin got her way up to the office in New York from the middle of New Jersey to make sure it all happened.

Wow, wow, wow, that's, that's a pretty remarkable story. Yeah, that's a tough one to top. That's amazing.

How—

let me ask you about the pandemic. How— what was the impact on the firm, good, bad, and otherwise? Any interesting takeaways or changes in the evolution of the firm that might even be perhaps permanent now?

Yeah, I think I never thought in my wildest dreams that I could feel comfortable working from home. And, you know, when they said, sorry, you can't come into the office anymore, I panicked, but quickly, you know, got all the home devices and the phones and everything. And I think, you know, certainly I and the whole team were pleasantly surprised that it was a much more seamless process than I ever thought it could be. Our team production last year in 2021 was up dramatically from 2020, which was also up from 2019, and we're tracking similarly this year to last year's production. So that's been a very good thing. Initially, we had one team member in the office for the majority of 2020, or for late 2020 and early into 2021. Because he lived a couple blocks from our office. But in the past several months, I would say people are up here at least 3, if not 4 days a week. So I think Morgan Stanley as a firm is not going to insist on everyone back in the office 5 days a week. I think there will be some flexibility, but I think 3 to 4 days a week will, will be the norm. Crystal, you may want to talk about how you feel about what, what's happened over the past couple years.

Yeah, I would say that I didn't think I could be working, you know, for example, I think a lot of us have been traveling or upping our travel, and I, in the past, you know, when I left my desk and was going to the airport, you know, I was like, you know, I could not be reached very, very easily. But now I found that, you know, I've been in taxi cabs going to the airport and I've been able to hotspot and actually work remotely with my laptop. And I think that's pretty cool that, you know, I can still be tuned in if I want to be. And I think that flexibility for whether it's visiting clients out of state or things like that, just the ability to still be working. You know, with a smaller screen, but be tuned in, I think has been really helpful for a lot of us so that, you know, we're not really, you know, missing anything if we are doing travel. And I think it just— it's— I don't know, I think it's been helpful with that sort of work-life balance to sort of be more flexible about not fully being stuck to your physical desk at that physical office.

Yeah, it's interesting you mentioned flexibility and It's also the clients in a way, right, who have to be flexible because many of them pre-COVID were accustomed to maybe having the face-to-face visit, right, sitting down, having the coffee. And I've just heard enough about some who initially were unhappy with the prospect of not having in-person meetings, but then many of them in short order realized, hey, this isn't so bad at all. It gives me more flexibility with my scheduling. You don't have to get— it's much easier to arrange meetings. And I'm just curious about your experiences with clients. You know, how has that changed or manifested for you, your team?

Yeah, I think it's definitely been a mix. So we've had a lot of clients be very comfortable coming into our office. So we actually have had a fair amount of in-person meetings in our office. Some clients love Zoom and are really happy to use— they would prefer Zoom as opposed to them driving 2 hours into Manhattan to meet in our office, or vice versa, us going out that far. Because I mean, that's just the travel time alone, that a round trip for somebody could be like 4 hours, right, just for a 1-hour meeting. Yeah. And then we've had clients who we've offered up Zoom and in-person, and they're just like, can I just do a conference call? Like, I do not want to be on camera anymore. Like, just give me a dial-in. So it's been a mix of things, but, you know, the fact that we can offer, you know, all these options has been helpful for clients, I think.

Okay, so I want to swing the conversation back a little more to the, to the multi-generational aspect. What are trends that you're seeing or things that you believe are worth adhering to, abiding by, or, you know, where that proverbial hockey puck is going? I'm just curious about that, what you're hearing and seeing.

Yeah, I would say it's no secret that there's going to be a huge generational transfer of wealth over the next 10 to 20 years. And I think it's critical to have a team structured so that, I think we have someone from 20s, 30s, 40s, 50s, and 60s on the team, so it's nice to be able to have people who can relate generationally. And we purposely try to have multiple people on the team interacting with each client so that at some point over the next 5+ years, if I decide to phase out, it's not going to surprise anyone, and they will have worked with everyone on the team very closely for multiple years.

And I guess the teaching obviously goes up and down the ladder. Everyone can teach someone else, right? Everyone's got their strengths and weaknesses, and I guess it's a constant teaching and learning process.

Yeah, I mean, Greg, you asked about trends in terms of different generations. I mean, I find myself to be fairly tech savvy, but clearly there's a new fad or trend constantly. So we do have different team members who have different varying technological expertise. So I think that what is nice about having different people from different generations is maybe they're thinking about something that you're doing constantly. For example, on the client service side, right? You know, we used to— everything used to be by paper, faxed in or scanned in, and it's all typed up. Obviously COVID accelerated a lot of the e-authorizations. So for subscription agreements, transfers, these are all, you know, e-authorizations. And now, you know, even clients have been, you know, when we have to have them actually physically print out and sign something, like, wait, there's not e-authorizations? So I think that, you know, they, they're able to give a perspective of what new technologies might be better in being more efficient about how we run our practice. And also just, you know, their ability to teach clients, you know, this actually is much easier, more secure if we do an eAuthorization than printing, scanning, faxing, or emailing a document. So I think that, and I would also say what has been also helpful is I think cybersecurity has been a hot topic for a lot of people, especially clients who, you know, we see clients, you know, attempted phishing and things like that. So I think, you know, our entire team has sort of trained each other to be on the lookout for, you know, don't click on that, what to look for, because these are like the little things that we can help our clients do to sort of, to keep their assets and their wealth safe as well as their identities.

And are clients generally, I mean, eager to hear this? I mean, is it— it's not like, oh, it's homework to do. I mean, they obviously out of self-interest presumably want to arm themselves and have all this at their disposal, right?

Yeah, I think a lot of the clients, they realize any extra security measures we take or things that we're doing are helpful to them. And some have ask us questions like, what should I be doing next? There will be some clients that, you know, it's just they don't even want to really try, you know, statements or things like that. But I would say the majority of clients are very open to learning the best ways to protect themselves in that sort of sense. So I think, you know, these type of things are constantly changing.. And we constantly have to figure out what the next, you know, hacker or scammer is trying to do and what we can do to prevent them from, from doing that.

Yeah, yeah. And, and I'm curious about in terms of the younger clients, are there any themes or common concerns, wishes, etc., that you're hearing from them?

Yeah, I think that the younger generation they are much more aware of— they really want to know what you're providing them. So they don't just want investment advice. There's a lot more thought into planning, tax planning, sort of really planning out their and mapping out their future. And I would also say that they appreciate and want to know a lot more about the fees and the transparency because obviously there's a lot of low-cost providers out there. So we have to make sure that we're showing them the value we provide and, you know, the cost of, you know, doing that in terms of fees and things like that. And then I think in terms of the investing side, I think I'm seeing— I'm definitely seeing more clients interested in ESG and sort of like the crypto space. I mean, they ask about that. I mean, obviously it's really still early on in that, but you know, it's hard for them to avoid seeing information like that on the news constantly. So, you know, I think it's all a matter of education first for them. And then before they really dive deep into the investing side.

Have you noticed any correlation between the price of crypto, let's say, and their relative interest? Because I know just more broadly speaking, when, you know, Bitcoin was over $60,000, etc., you know, the interest, the money going in was a lot more. Now it's down. It kind of correlates. Is that kind of what you're seeing? I mean, or depends.

Yeah, I think that, you know, you hear these, you know, we've talked of, I mean, it's not just young clients who are asking about that. I've had some older clients, and everybody has a friend or a cousin that bought Dogecoin that made 1,000x or something ridiculous. And I was like, it's not— you know, if it's, if it's, if it's too easy and it sounds too good to be true, you know, yeah, probably is. And, um, I think a lot of our clients, when we were talking to them about the crypto space and, you know, how it's really unregulated and, you know, we just don't— you know, it hasn't been around long enough, and, you know, and I definitely dissuaded a few clients from, you know, going all in. And it wasn't really held at Morgan Stanley because we, you know, this— we, we have certain offerings that we were allowed to have. Um, and, you know, a couple months later they're like, well, you're right, probably, you know, I'm glad I didn't go all in on that one cryptocurrency and things like that. But yes, um, there were more questions when it was, um, yeah, much higher. Yeah, the chart— the charts are going up.

Yeah. Exactly. So I was just curious, um, because we don't have a ton of time, but I, I'd be remiss if I did not ask you about the market and maybe what clients are hearing. I mean, the market yesterday, I believe it was its worst day in over 2 years, um, and I know that you do a lot of investing in the, in the alt space, but I just was really curious, given the, um, um, the, the nature of your clients in particular, I'm really curious to hear what you're hearing and you know, even in broad strokes, what the sentiment is, etc.?

Sure. Yeah, yesterday was clearly unnerving. You know, 4 to 5% drop in the market, unfortunately though, is becoming not as uncommon as it used to be. But I think yesterday was really the equity markets catching up with the bond market's view of what's going to happen on the interest rate side. But the way we've generally structured client portfolios is to have anywhere from 30-plus percent in alternative strategies with generally no more than 40 to, you know, upper 40% in long-only equities. And that really has stood the test of the past 6 to 9 months very well. It allows for steadier returns over time. Lack of correlation between, you know, long-only equity and fixed income. I mean, this is, as we all know, the worst year in 40 or 50 years in both fixed income and equities for the first 6 to 7 months of the year. And most of our clients are financially sophisticated. The majority have Wall Street or finance-related backgrounds, and those who don't were generally either former C-suite executives or people who understood the markets. So they like the complexity of a lot of these strategies and they like how it isn't just a beta play. So fortunately our platform at Morgan Stanley is very robust and we get access to most of the more interesting alternative strategies out there.

And are there any assets, you know, amongst alts or anything where you see particular value?

I mean, yeah, I mean, I'd say we've been very successful in investing in multifamily apartments through a number of vehicles. It's, it's, well, it's done very well. We still think it has a long runway ahead of it, given given what's happening with the cost of homeownership, given lease rates resetting on a regular basis. Supply-demand is very much in favor of that asset class. We also, on the alternative side, we've been using a lot of private equity and private credit, private real estate secondaries funds, where the managers are able to buy seasoned positions at meaningful discounts to net asset value there's a lot of forced selling as institutions and family offices rebalance. So that's a very compelling space right now. And in managed futures, which are commodity trading advisors, those have done quite well in the past year or two. They are able to make money in up markets and down markets and really don't have to see a single direction in asset classes to do well. So they're pretty nimble in that regard. But those are are 3 examples that we've seen a lot of interest in. Crystal, I don't know if you have anything to add there.

I mean, I mean, on just for some clients who are ultra-high net worth, I think we've seen some munis when it's been distressed dip to levels where, you know, it's pretty boring, but we're just buying some, you know, high-quality investment-grade munis. And I think that, you know, sometimes just traditional yield plays can work if it's attractive enough, you know, to balance out some of the alternatives.

Great. Well, we're just about out of time. So thank you so much. It's been a really, really great conversation. I appreciate you taking the time.

So thanks, Greg.

Thanks, Greg.

Thank you. So thank you again, Scott and Crystal. And as a reminder to anyone watching, the How to Succeed The Seed and Succession Planning Intelligence Report is available on barons.com. I hope you read it and enjoy it.

Thanks. This podcast was brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com.