Morgan Stanley Regional Director Lisa Cregan: “Scale is essential to success in our industry…”

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k-tcc’s CEO and Founder had the opportunity to speak with one of Morgan Stanley’s Regional Directors, Lisa Cregan, earlier this week. As a pioneer in her field she’s risen quickly up the management ranks at elite Wall Street firms – Paine Webber, UBS and Morgan Stanley. Her story is unique and catalogues a dream that started when she was a “12 year old Vice President” of her grade school’s stock club. As the Regional Director of the Mid-Atlantic region at Morgan Stanley, Ms. Cregan presides over 1360 advisors, 51 offices, $1.25 billion in revenue and better than $150 billion in client assets. In our discussion she admitted that those numbers are just a smidge more than what she managed as the Vice President at her grade school stock club.

Below we discuss her career path, her decision to move to Morgan Stanley in 2010 and what the scale of Morgan Stanley adds to both elite advisors and their clients:

Andrew: Can you give our readers a brief description of your personal career journey? Maybe describe a few important “forks in the road” along the way that have shaped where you find yourself today?

Lisa: Sure, I would be happy to. So I am a little bit different from other people. I have had a very interesting journey. I always knew that I wanted to be in this business. When I was 12 years old I was made the Vice President of our school stock club. That was when I knew that I wanted to be a stockbroker. I went to Georgetown undergrad and then got my MBA. I started with Paine Webber Jackson Curtis in 1983 as a financial analyst. There was a group of 6 of us who supported the CFO. The woman who hired me was Diane Frimmel.  She was a great mentor and really helped me get my start in the industry. We basically did all the financial analysis for  the different business units in the firm. We rotated around. I was really drawn to the field (field sales and management) and decided then that I wanted to be a Branch Manager. That was my first turning point. In order to do that I had to become an FA so I went into the new financial adviser-training program and I was an FA for several years. Then over time my manager gave me more and more sales manager type duties in the branch. Back in those days we had product coordinators. I would work with new financial advisers. Then I went through branch manager assessment and passed it  in 1989. My RD was a crusty old guy and he said after I passed assessment, because they didn’t really think I was going to pass, “You know honey, you can’t really be a branch manager. “ And I said, “Well why not?” He said, “Big producers aren’t going to work for a woman. It will never work.” So, I said, “Alright, I guess I can’t do that.” I went to work in the new FA training center. This was another big turning point because right when I felt like I was at my lowest low the position took me to San Francisco. That just happened to be where a future mentor of mine was building a team. Jim Klein, who I had met when he was an RD, had become the head of the managed futures department and he was forming his new team. He was looking for a national sales manager. I called him and said, “I really want to be your national sales manager.”  He laughed and said, “You don’t have the experience to do the job.” I said, “Yeah, that doesn’t matter. I’m a fast learner. I’m going to out- work everybody. I’m the gal you need. You just got to put me in this position.” So, I kept calling him and calling him. My persistence finally wore him down when I said, “Look, if I’m not any good after a year, you don’t have to fire me. I’ll quit.” He ended up giving me the job and we worked together for 5 years. It was a great partnership. He was a tremendous mentor. He really taught me the art of persuasion and selling.

Andrew: Lisa, all of this was at Paine Webber and then UBS correct? Give us a sense of your transition to Morgan Stanley.

Lisa: Yes, this is all Paine Webber. So we did that for 5 years and then I raised my hand again to see what the temperature was like to be a branch manager. This time I got a much better reaction. Hale Cullom, was my division director and he made me an associate divisional sales manager, which was the job I did while I was on the bench for a branch. I got my first appointment. I became the Branch Manager of the North Dallas office in 1993.  I was there 8 years. I grew it from $4 Million to $20 Million, which was a big increase, but the numbers sound so small compared to the businesses of today. It’s almost embarrassing. But it was a good number in those days. Then in 2002, I was promoted to Region Director of the Mountain Region. That took me to Denver. That was the worst performing region when I got it. I moved it up to 6 out of 13 in 6 years. Now we’re up to 2008 when the financial crisis hit. The firm contracted like all firms did and they went from 13 regions to 8. My region was eliminated so I had to disband the entire thing. I went back to Dallas and ran the Dallas market. I was there until 2010. I decided then that in order to achieve my personal and professional goals, I needed to find a different firm, a firm that had similar values to mine. I met with all the major wirehouses and several small firms. My first decision was  whether to go with a big firm or a small firm. It became really obvious, after meeting with both, that scale is essential to success in the industry. It was critical in order to build a world-class platform. That obviously put me in the big category and I ended up choosing Morgan Stanley for 4 reasons: Number one is: We’re not bank owned. I wanted to be with a pure wealth management firm and about 50% of the revenue of this firm comes from wealth management and asset management. I knew that if this was the case, this firm would obviously devote significant resources to serving the wealth management clients and that we would be able to build a world-class platform for those clients. The second reason, and it took me many years to learn this lesson; I needed to make sure that I shared the same values with senior leadership. Morgan Stanley’s core values are: putting clients first, leading with exceptional ideas, always doing the right thing, and giving back to our community. I loved those values. They’re very simple and to the point. In my conversations with senior management, they all lived those on a daily basis. I was so impressed by that. Third, I looked at the culture that those values create. This leadership team is relentless in its pursuit of excellence and improving the firm. I had never experienced anything like it before. They’re open to feedback. They listen to ideas. They act on the ideas and suggestions offered by the FA council and the Branch Manager council. They’re very driven in that regard. I love that because I’m a fixer by nature. I like things to work better and I like to be a part of that kind of team. The last is, it was important to me that diversity was important to this firm and its senior leaders. I believe that it is important to James Gorman and everybody on down below him. I had never experienced gender bias until I joined the work force. From the beginning of my career I’ve worked hard to be successful in the industry and prove that a woman could do it and I’ve always worked to be a role model and to advocate for women and open up the industry to them. I wanted a firm that really got it and wasn’t just saying the right words. They truly believed that increasing the number of women was a critical business imperative.   For all of those reasons, I chose Morgan Stanley and they chose me back. I started in September of 2010 as Complex Manager in Houston and then I was promoted last March to Mid Atlantic Regional Director. The region has 51 offices, 1,360 Financial Advisers, over $1.25 Billion in revenue and we manage about $150 Billion in client assets. It goes from Virginia through D.C., Maryland, the Philly metropolitan area, Delaware and Southern New Jersey. It’s a really great region.

Andrew: So, just a little bigger than the $20 Million that you started with back in Dallas right?

Lisa: ::laughs:: Exactly, isn’t it amazing?

Andrew: It is. You know, that’s a great piece of dialogue on how you build your career and some of the challenges that you faced, working through those challenges and then at the right moments deciding that there were divisions that needed to be made that were right for what you wanted to get accomplished and also what you could bring to specific organizations. Thank you for going through that. Describe a typical day as you lead one of Morgan Stanley’s eight regions. You’re talking about hundreds of advisors and billions of dollars in assets. What does a typical day look like for you as you manage not only people but also processes?

Lisa: My major focus is on  growth. I’m always working with my Complex Managers and my Branch Managers to help them grow their branches. I also spend a lot of time working directly with FAs. When I do I’m making sure that they have the resources they need to build their practices and I help them “connect the dots” by leveraging the power of the platform for their clients. I’m on the road a lot visiting branches and meeting with FAs. I’m on the road every week. When I’m meeting with FAs I’m trying to get feedback on how we can improve what we do here. I always have lists that I’m working off of ideas that have been given to me from FAs. I’ll work with them to help make it happen through the home office and I always get back to FAs. I’m really big on that follow up. I have a great regional team. They also work with the managers and the senior support staff managers in the complexes. They work to help with development, service risk and then also building a more diverse FA/Manager population. My passion, Andrew, is to  help change the face of Morgan Stanley. Part of what I was talking about before is that I’m very committed to this. I’ve increased, just in the first year that I’ve been in the role, the diversity of the management population and the FA population. My work is really focused a lot on helping men and women question what I call the “Unquestioned Assumption” that men and women are the same. Obviously we’re not. We’re equal but we’re not the same. This is so important because to me, recognizing this difference is the real difference maker. I think that embracing the skill and the perspective that women and diverse talent have to offer is going to make Morgan Stanley the best in the industry and the firm of choice for  diverse talent. It’s part of the legacy that I want to leave in this business.

Andrew: Number one, it’s important. Number two, I don’t think it’s in your job description but the fact that you’re passionate about it is a credit to you and how you’re giving back inside of your own organization for the right reasons. Obviously growth is top of mind for you on a daily basis. Walk us through a typical scenario where you as the Regional Director are meeting with an important recruit. What does that pitch look like if you’re speaking to a PBIG team, a UBS Private Wealth team or someone that has been in their particular chair for 25+ years? When they’re evaluating a transition to Morgan Stanley, what is it that you say as to why they should be at there?

Lisa: I mentioned already that not being bank- owned, scale, resources, investment platform, and our culture of excellence are key reasons. In addition, I believe our CEO James Gorman is a difference maker. He’s an exceptional leader. He has transformed this firm in such a short period of time that it’s amazing. We now have a world-class investment bank coupled with a world-class wealth management business, which is a pretty hard combination to beat. I love the fact that we have a really flat organization. What that means to an FA and an FA team is that the decision-making authority is in the manager and the complex manager’s hands. When they need an exception or they need something done, the complex manager can make those calls. There are 3 key differentiators of our platform: our consulting group business, our capital markets business and our alternative investment platform. The consulting group business dates back to E. F. Hutton.

We were the first to create separately managed accounts for a broad retail client base. We’re perennially number one in market share. We’ve got $823 Billion in assets under management in our consulting group business. We’ve been a market share leader for 42 consecutive years. The Money Management Institute just recognized us as having the best-managed accounts platform in the industry. We do this by being innovative. As I said, we were the first firm to create the SMA and also the PM and the UMA platforms. Our global investment manager research eclipses the other firms.  We cover over 1,100 investment products and solutions. That’s incredible. We have a very robust Graystone Consulting business. We’ve got 51 teams around the country that serve institutions such as foundations, endowments and Taft Hartley programs. Our capital markets capabilities, those came from the Morgan Stanley side. We have more than 200 analysts embedded within wealth management every day combing the books of the firm and looking for trading and swap ideas for FAs and clients. I don’t believe any other firm has this. It’s something that when FAs come, they immediately see an uptick in that business just as a result of those efforts. Our alternative platform is the best in the industry. We do more alternative business than Merrill and UBS combined. We have a very large suite of products on the alternative investment platform. Our technology, also, is a game-changer. The progress that we’ve made since the conversion in 2011 is really astounding. We do it because we spend a billion dollars a year just on technology. To put that in perspective, that’s as much as the total operating budget of a lot of our competitors. That’s what we spend just on technology. Our Advisor Insights technology is a way that we deliver investment research and ideas that are specifically tailored to each advisor’s book, holdings and the things that they like. It’s an algorithm that learns as it goes and it has redefined how ideas are delivered to FAs. It’s very, very innovative. We’re also consistently improving things. Our FA websites are being redesigned. Our online offerings to clients are being redesigned. It’s just constantly under improvement with the amount of money that we spend on it. Also, we’re very innovative when compared to our competitors. We were the first large firm to allow our FAs to harness the business development power of Twitter and LinkedIn and we’re currently piloting Facebook. We’re the only large firm that allows our FAs to write their own tweets which is very cool. Our lending platform, which was created in 2010, has grown to be state of the art. We have a new liquid asset line platform that’s being launched as we speak that’s incredible. We went from nothing to $60 billion in loan balances in 4 years. We’re not bank owned. We own a bank and that bank is the tenth largest bank in the U.S. It’s very impressive. Last, there’s a lot of customized marketing that FAs can do. We have an array of brochures that all tie into the same message. We have an ad campaign, “Capital Creates,” that FAs can tie right into within their local communities. It’s really a place that’s designed to serve the wealth management client and help FAs grow their practices.

Andrew: So, a lot of the discussion is focused on scale and as you said, that’s one of the principle reasons why you chose to join Morgan Stanley because you believe in scale. Speaking of scale – what role does scale play in the success of advisors/teams at Morgan Stanley? How does scale positively affect clients and their relationships with their advisors, and what are the challenges?

Lisa: Scale really means financial resources. Financial resources mean that we can spend money to build world-class technology, a world-class investment platform and research. Smaller firms with fewer FAs don’t have the revenue so they don’t have the resources that we have and they can’t invest as much money in their firms as we can so their platforms don’t have the same robust offerings and technology that we have. On the positive side, that means that our FAs have more investment products and solutions they can offer their clients. They have better investment intelligence available to them. Our technology lets them scale their practices and efficiently manage their client’s assets and as a result they can do a better job serving their client’s needs. I would say that when somebody sells against scale they say, “Well, you’re just one small person in this big firm and you get lost.” To me, if you know whom to call to get something done then the firm doesn’t feel big. That’s why I like to meet with FAs and always know and work on the types of issues they’re having. I connect them to the resources, then they know who to call to get something done.  Then we have a small firm. We have a large firm that feels small, and that’s what we strive for. When FAs look at Morgan Stanley from the competition and they see what we have to offer, they’re always amazed at how we have situated ourselves to really be the best financial services firm in the world. Interestingly, the numbers prove that our FAs are better situated to serve their clients. We have, on the Barron’s top 100 list, 32 advisers on that list. We have more than any other firm. We have the number one spot and we have 4 of the top 5 spots. This year Barron’s added a top 30 Institutional list. We have 13 advisors on that list including the number one spot, and Graystone was rated number one. There are so many positives. It’s so easy to make sure that FAs feel connected that I don’t feel scale is an issue anymore.

Andrew: Here’s a quick follow up which I think will be very interesting to our readers. What’s it like to manage a relationship with a Barron’s 100 advisor or team? What does it look like managing a team that’s the size of the initial branch that you started your career with?

Lisa: Isn’t that crazy? My top FA in the region does $8 Million so that’s twice the size of my first branch. It’s the most fun you can have in this business. I love working with big teams. The reason is because they are 100% focused on growth. All of the activities are, “How can I help you with practice management issues? Do you have a big client that needs an exception? Do you want me to meet with a client and help bring them in? Do we get them to a VIP visit in New York?” Everything is all so positive. It’s really the most fun. I’m very much in contact with my big teams and I see myself as very much a part of their growth plan.


The message here is that scale is a significant differentiator. If nothing else it gives you options…more options than firms who may be attempting to cover up their lack of scale with smoke and mirrors. Morgan Stanley is not that firm. Whatever quibbles you may have with how they choose to conduct their day-to-day operations and foster their culture – one quibble you can’t have is that they are committed to ‘their way’.

Ms. Cregan’s journey is unique in that it closely aligns with the sometimes not so delicate shift away from old stereotypes on Wall Street to today’s more modern views that leadership isn’t gender specific. Leadership is about performance and relationships, and at times one may come before the other. If one thing is abundantly clear from this conversation it is that Morgan Stanley, and specifically the Mid-Atlantic region, is in good hands. As Morgan Stanley’s leadership bench deepens, Lisa Cregan is sure to find herself at the head of the class.

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