For a number of years many of Morgan Stanley's most affluent customers have expressed one overwhelming concern: how will their children and grandchildren handle their inheritances. They are not so much worried that their heirs will squander their fortunes as to how they will live. It is a question of such urgency and importance that the leading brokerage firm has begun having daylong seminars for the wealthy young millenniums.
Last month Deborah Montaperto and Mary Deatherage, the two Morgan Stanley brokers putting on the third annual event in New York, invited me to attend. The estimated thirty trillion dollars of wealth that baby bombers alone will pass on to the next generation has the potential to change the fundamental nature of American society. It can be an engine of unprecedented good, or it could end up creating two Americas, a narrow, self-involved elite living on an island of privilege and the rest of us.
The good news is that the generation who made the money mainly on their own is worried. They fear they have given their heirs everything but what matters most : lives of excitement and challenge. The good news, too, is that 150 wealthy heirs between the ages of 18 and 31 were willing to assemble in the Morgan Stanley New York headquarters to participate in a day-long seminar for "the next generation of leaders 'Making an Impact.'"
The first speaker was Harold Ford, Jr., a Morgan Stanley managing director. The former Tennessee Congressman's subject was the 2016 presidential election. Although two-thirds of the voters in the primaries have called for radical change by pulling the levers for Donald Trump, Bernie Sanders, and Ted Cruz in the most dramatic, unusual election in decades, Ford sees it otherwise. He says things will settle down as they always do, and it will end up business as usual with both candidates nudging their way to the middle. At that point, Americans will be able to decide whom they will back. As far as the crucial issues, he mentioned neither Isis, the deteriorating infra structure in American cities, or the problem of wealth inequality. His transcendent concern appears to be the financial regulation of the financial industry, and once the candidates make their positions clear it will be time to anoint a champion.
In the end, the American voters will elect the best candidate since Ford believes that is what the people in their infinite wisdom always do. For such a defender of the status quo, I thought at least the conservative Democrat would suggest to the privileged young people sitting in front of him that they learn about American politics by working in one of the presidential campaigns. But he didn't say that. I suppose when the best candidate always wins, it's just as well to sit back and watch.
Ford was followed by Dr. Heath King, a psychoanalyst and former Yale lecturer. He was to speak on the same subject, but he broadened it considerably talking what the world would be like in the future. He brought up any number of intriguing subjects including how many CEOs were first educated in Montessori schools, and how a third of the start-up CEOs in Silicon Valley are Indian Americans. He posited an exciting world of challenge, but nothing practical that those in the room could use to direct their way in the future.
That matter was taken care of by the next group of speakers. Nancy Pfund is the managing partner of DBL partners. DBL stands for "double bottom line," the idea that an investment can both make money and a social difference. She is not just a passive investor but also an actively engaged business coach. Over the years she has put money in any number of startups that most of her colleagues passed by considering them wildly quixotic. One of them was the Tesla Motor Company that with its new, reasonably priced all-electric car may change the whole nature of the automobile business. Her low-keyed, matter-of fact manner was far more compelling than if she had strutted around the room with boastful hyperbole.
Pfund's presentation was even more effective because she introduced entrepreneurs who exemplified precisely this kind of double bottom business. The most impressive was Doug Evans, CEO and Founder of Juicero, a $700 cold press juicer that uses packets of organic fruits and vegetables. Starting with less than nothing, Evans has received about $120 million in funding. Wearing sandals and jeans and looking like an aging hippie, Evans stood out in this room full of expensively dressed scions of wealth. His was a tale of overcoming great challenge, and he mesmerized these sons and daughters of privilege who had never in the lives experienced for one hour the difficult challenges Evans had for much of his life.
At the end of the day, I kept thinking of Joseph P. Kennedy. He had made one of the great American fortunes as a businessman, but he wanted his sons to enter politics. He sought that because that's where he thought the action would be for the next generation, and so it was. I think Mr. Kennedy these days would want his children to involve themselves in double value entrepreneurship, and that's the direction many of these wealthy young Americans are likely to go.
Clearly, Morgan Stanley is interested in managing the billions of dollars that sat out in that seminar room, but it was the softest of sales, and the firm offered broader kinds of counseling that could play an even more crucial role in these lives if they become entrepreneurs. It won't be easy, but if you're an entrepreneur, it never is.