- Each year, some 100 Morgan Stanley advisors take a course to earn the family wealth director title.
- The hardest part of the 150-hour program is a live case study.
- Morgan Stanley executives Alex Chester and David Bokman share what trips up advisors the most.
Every year, about 100 advisors at Morgan Stanley take an exam in order to work with high-net-worth families. Only some 60% pass on their first try, and about 75% eventually pass after retaking the course, sometimes multiple times, and that’s the point.
“We don’t have a requisite number that we’re looking to put through the program,” Alex Chester, who runs the bank’s family wealth director program, told Insider. “We want to make sure that the advisors that we’re promoting are equipped to work with the very best clients of the firm.”
The internal training course leading up to the test takes about 150 hours, Chester said, depending on the advisor’s prior level of experience. Test takers have to study 17 modules, most of which focus on estate planning, and then take a written exam. Family clients can be lucrative as advisors can sell them a wide range of products such as lending.
Studying in addition to a full-time job is the easy part. What stumps most advisors is the final portion: a live case study.
David Bokman, Morgan Stanley’s head of family office resources, and his team, pretend to be a high-net-worth client and their accountant or attorney. Advisors get one hour to talk to the pretend client, and another three hours to come up with detailed recommendations.
Bokman gave a hypothetical case study: a couple with a wife selling a successful business whose husband had inherited wealth. Part of the challenge is asking the right questions to learn that one of their three children has a drug addiction, and that the couple is not sure how much to leave to each child given their different needs.
“There could be a family dynamics challenge we don’t necessarily tell you about, but the facts would lead you to ask the questions to unearth it, Bokman told Insider. “If you didn’t unearth it, you’re going to have a lot of difficulty coming back with solutions.”
Since 2019, every advisor in the private wealth management division, which works with clients worth $10 million or more, has to take at least an abridged version of the course. Each team has to designate one member to complete the full program and exam and earn the distinction of family wealth director. This applies to new hires and internal staff who want to level up and work with rich families.
The course has been updated over the years, with recent new modules on behavioral finance and impact investing. They are thinking of adding a unit on lifestyle advisory – the Morgan Stanley-vetted firms ranging from private aviation to concierge healthcare – as well as specific lessons for working with executives.
But estate planning is still the bread and butter of the training, said Bokman, a trusts and estates lawyer. Part of the course teaches techniques on raising personal questions on inheritances and selecting trustees in early conversations.
“A lot of times, because it’s sensitive, there can be caution on the part of the client and on the part of the advisor,” he said. “And yet, that sensitivity actually suggests that you want to bring them up as quickly as possible, because what you don’t want to do is go too far down the path of an investment plan, a charitable plan, an estate plan, without understanding what those issues are.”
This story was originally published in September 2019 and most recently updated on August 16, 2023.
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