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Morgan Stanley’s Andy Saperstein made a bold prediction late in 2019. Those words have resonated in the midst of the coronavirus pandemic and the current wealth management climate. In a world where the majority of financial advisors and teams are operating from home and conducting client meetings via video conference, one wonders how a ‘mega team’ would function.

Mr. Saperstein’s prediction should cause the hair on the back of your neck to stand up. Saperstein believes that the firm will create larger and larger teams to the tune of $50-100M in annual revenue. And during a crisis teams will be encouraged to merge. As far as a corporate road map, the COVID-19 pandemic is providing an opportunity for Morgan Stanley to double down on this strategy.

Raise your hand if you think those types of teams will serve to force advisors to sign more and more legal paperwork giving them less and less client ownership?

While it may sound glamorous to be a founding principal at a $50M dollar team at Morgan Stanley you have essentially biometrically tethered yourself to the firm for life. Limited your liquidity event prospects and the annual compensation whims of the firms leadership.

All autonomy is lost. You’ve become a pseudo branch manager at that point. How do things go for ‘maverick’ branch managers at firms like Morgan Stanley? Likely not well.

Pushing the idea of, and eventual roadmap to these ‘super teams’ is frought with death traps for the advisor and only upside for the firm and its profitability. To say nothing of clients attempting to navigate connections on a team of 35-40 people.

Maybe the most important point to make here is this – Andy Saperstein isn’t just going to go off-script with the press. These comments are well thought out and approved by those above him, specifically James Gorman. Legally locking down client assets in anyway possible is part of their strategy.

Keep that in mind.

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