Meeting Gregory F. Laetsch, 6 feet 4 inches tall, 215 pounds and buff, you immediately think: football player.
And you wouldn’t be wrong. Fresh out of college, Laetsch was a receiver for the Seattle Seahawks. But a foot injury put the kibosh on his budding pro sports career the first season.
Bummer — except that the gridiron’s loss was Wall Street’s gain. For the past 31 years, Laetsch, 53, has chalked up victories as an outstanding player in the financial services arena, all three decades-plus at Smith Barney and its successor firms.
Appointed managing director and complex manager of Morgan Stanley Smith Barney’s seven-branch Los Angeles complex in 2009, following the two firms’ merger, Laetsch is something of a legend within the company, famed for his impeccable ethics and credibility, and reputation as a rare straight-shooter.
From his double-size office in a 48-story building on the corner of Fifth and Flower Streets in Downtown L.A., the unassuming Laetsch manages 197 financial advisors — including 10 recruits and 37 trainees he has hired since his promotion to the complex post. All told, the FAs have $17.6 billion in assets under management.
Last year the complex scored as one of MSSB’s top three in revenues nationwide. In 2009, the L. A. branch — of which Laetsch also is manager — was the firm’s most profitable in Southern California, owing to cost cuts and revenue preservation.
Under pressure, Laetsch is calm, cool and unrattled. But taking charge of seven MSSB branches — Los Angeles, Long Beach (2), Manhattan Beach, Torrance (2) and Palos Verdes — in the depths of the country’s worst financial crisis since the Great Depression, presented a unique set of hurdles, not the least of which was how to boost FA morale.
“That was one of the biggest challenges of my career. Many advisors owned stock in Smith Barney or Morgan Stanley and were worried. But most were far more worried about their clients. I communicated as much as possible. I believe in being open and honest and telling people about the not-so-good as well as the good things. I felt it was important to be visible and a role model,” says Laetsch, in whose speech are traces of his native Asheville, N.C.
He is well known for the enduring relationships he builds with both advisors and staff members.
“I hear people say all the time, ‘I’d work somewhere else, but I don’t want to because of Greg,’” says Michele Hanna, senior complex risk officer, with Laetsch for more than 12 years and on his 23-member complex management team. “After the merger, those of us working with Greg felt very strongly that we wanted to stay here with him in whatever role he wanted for us. Some [accepted] secondary roles to be part of his team.”
Since taking the complex reins, Laetsch’s biggest achievement perhaps is proving to have been on target with the investment strategy he established during the financial meltdown. “We were early in helping people believe in the return of the equity market,” he says. “In the toughest of times, when it was difficult emotionally for clients, we were advocating to buy stocks and make sure clients had an appropriate allocation so they could take advantage when the markets rallied.”
Helping advisors make good investment decisions — on top of gathering assets — is indeed one of Laetsch’s key priorities. He relies on both MSSB research and his own.
“I try to free myself up to be the investment leader and the primary person who helps set our investment strategy as well as drive revenues,” he says. “If financial advisors make good investment decisions, clients prosper. It’s also good for compliance because then we don’t have big problems of people making poor decisions.”
For 2011, Laetsch’s prime goal is to grow revenue and assets by 10 percent each. At the same time, another ongoing major aim is to create an environment that embraces what he calls “the gold standard” of investment advice, staffing and resources.
Laetsch’s Downtown L.A. branch is located in a now-trendy part of the city. Until a few years ago, it was considered a virtual Siberia in which to work and live. Now, with nighttime attractions and new residential allure, it is helping Laetsch pull in FAs as well as clients.
“We’ve attracted advisors from competitors, which [because of location] would have been very difficult to do 10 years ago,” he notes. The office now boasts a total 97 advisors — 62 from the legacy Smith Barney office, 23 from the legacy Morgan Stanley and a dozen new hires — both recruits and FA trainees — that Laetsch has made.
Recruiting, in fact, ranks on the manager’s list big-time. He is fussy, however. “It’s not just revenues but the type of person they are. We hire young people who I believe to be good, solid human beings — honest, ethical and driven to be successful. The same goes for experienced advisors who do a lot of business — the right way. I’m not interested in hiring people who are mediocre,” he says.
Laetsch is immensely proud of his extensive complex management team that includes supervisory managers who focus on operations, risk officers and a business development officer concentrating solely on products and services. Laetsch considers, and relates to, each manager as his partner.
Brad Dykes, the complex business development officer, notes: “Two distinct cultures [Smith Barney and Morgan Stanley] have been brought together, so people may be [wary]. But with Greg, everything is on the table honestly and openly communicated. There are no secret deals; nothing is hidden. Yes, we need to grow our business; but that doesn’t come before the fair and equal way he treats people.”
Complex FAs are a diverse mix of ethnicities and ages — from 23 to 80 years old — and clientele is just as varied. It is served by advisors specializing in a wide range of investors and investment vehicles, encompassing high-net-worth individuals, stock plans, 401(k) plans, corporate services and institutional clients.
The L.A. branch — one of 800 MSSB offices worldwide — occupies 45,000 square feet on four floors of the Citi Building. His private office, on Floor 26, is in an open area, where, he says, “I can be involved with what’s going on.”
Football coach Vince Lombardi’s “What it takes to be No. 1” speech is posted on a wall close by Laetsch’s desk chair. Other words of wisdom — these from football coach Lou Holtz — are in a frame on his desk: “The best way to get what you want in life is to help enough people get what they want.”
Laetsch has taken that advice seriously. “I try to make a positive difference in people’s lives each day,” he says. “I believe great leaders are competent, confident, caring and committed.”
And he applies those qualities to what he lists as the main functions of a complex manager: retaining FAs, recruiting, sales and investment leadership, compliance, training and administration.
Laetsch has been a potent leader ever since his days as a Furman University football captain. Pauline Chui, management team complex risk officer, who has worked with him for 14 years, describes Laetsch’s approach as “trying to create a team during this time of big changes and confusion that’s not only powerful and proactive but also cohesive.”
She adds: “He doesn’t try to micromanage. He empowers the team to make certain business decisions. He gathers our brainpower. But he knows that when we need him, we need him.”
To be sure, Laetsch is keenly attentive to the significant role compliance plays, says Hanna. “I’ve worked with people in the past who, because they were sales-pressured and [mainly] looking at the bottom line, might not have placed as much priority on risk control. But with Greg, if I tell him there’s something important that must get done, he gives me his undivided attention.”
Laetsch’s daily routine goes something like this: Rising at 4:30 a.m., he drives 35 minutes from his home in coastal Palos Verdes and arrives at the office by 6:15. After reviewing the Wall Street Journal and studying research — both internal and external — he and Dykes write the Morning Notes, complete with quote of the day and a cartoon.
Next, Laetsch speaks by phone with his management team across all branches, then meets with Downtown-based managers and FAs — the latter, usually on the first of two daily, lengthy walk-abouts on all four floors: numbers 26, 27, 35 and 36. (“One of my biggest frustrations is not being able to see everybody every day.”)
Mondays at 8 a.m. he meets with trainees to discuss the capital markets and, he notes, “what they should be doing with clients.” He trains experienced advisors one-on-one. Twice weekly he holds investment strategy meetings with the FAs. From time to time he has meetings at the other complex branches.
Lunch — typically a salad — is at 1:00. He either dines out with FAs or makes the hour a recruitment meeting. In the afternoon there’s recruitment phoning and the next office walk-around.
He tries to call clients once a month and encourages advisors to have them to the office so he can join in meetings.
By 3:30, Laetsch is busy preparing for the next day — and beyond. This is his time to strategize. He usually leaves for home at 4:30 unless he has a business dinner; these occur twice a week on average.
Happily, his advisors no longer require the extensive bucking up of two years ago. Now both they and their clients “feel more confident as a result of the markets having done much better and the liquidity the Federal Reserve put into the system,” Laetsch says.
Yet, the FAs still need his support in coping with the industry’s myriad changes the events of the past three years have brought.
“Advisors have ‘change fatigue’ because, by nature, people are resistant to change,” he remarks.
Of course, a major change vis-à-vis MSSB is the merger. “Now everybody is working for an organization that has about [17,000] financial advisors. There are new people running it. I can’t control the organization’s culture,” Laetsch says, “but I can control the culture of the complex. I work hard to have one that’s in keeping with the gold standard we set.”
That said, Laetsch often talks with FAs about what can be learned from failure because his unforgettable takeaway from the world of sports is: Never quit.
“Sports teaches you about overcoming adversity and sticking with something when things don’t go well,” he says. “Sports teaches that to be ultimately successful, there is a lot of work and struggle.”
A Go-Getter’s Bio
Gregory F. Laetsch was born the only child of two Southern Bell Telephone & Telegraph employees. His frugal dad Frank encouraged a teenage Greg to save money and invest in the stock market.
“I always had a fascination with what makes stocks go up and down, and why bonds do well or poorly,” recalls Laetsch, who was headed for a business career. But at Furman University, he became a football hero. And right after graduating in spring 1979 — with a BA in economics and business administration — he signed as a free agent with the Seattle Seahawks, reporting in early summer.
Alas, a foot injury that season cut short his sports career. By fall, he was a financial advisor trainee at Smith Barney in Atlanta, Georgia.
Good move: Six years later, he was upped to producing branch manager and three years after that, promoted to co-manager of the Smith Barney Shearson Los Angeles office. In 1994, he took charge as sole manager. During the next decade, revenues were consistently No. 1 or No. 2 on the West Coast.
Such was the fruit of Laetsch’s having created a distinctive capital markets-oriented branch with advisors skilled in everything from private wealth management to middle-market institutional fixed income and equity.
In 1998 the manager gave up his book when he again moved ahead, this time to director of the Citi Smith Barney Southern California region. He opened four new branches.
Fall 2008: the financial crisis hit; and, Laetsch recalls, Citibank’s stock plummeted from the mid-50s to one dollar. The firm shrank from four divisions to two and from 20 regions to 13.
Laetsch’s Southern California region’s closing meant that, if he opted to stay a regional director, he would have to relocate. Deciding against that, he was offered the post of once again running the Los Angeles office. He made the switch in December 2008. A month later Morgan Stanley announced the Smith Barney acquisition, and Laetsch was appointed manager of the merged firm’s seven-branch L.A. complex.
“At Smith Barney, I’d been through a lot of mergers, but we were always the acquiring company. This was the first time we were the acquiree,” he recalls. “On balance, I was happy: Morgan Stanley had a very good name. But I knew there would be a lot of contraction, which would be difficult.”
What’s been the biggest adjustment? “Smith Barney managers had a little more entrepreneurial rein. The positive side is Morgan Stanley’s capital markets presence and working for a firm with a bank that’s part of it but not owned by it. That,” Laetsch says, “has been refreshing.” — J.W.R.
- Married to: Katy — former world-class marathon runner — for 26 years
- Children: Sons Alex, 22; Joe, 20; Ben, 17
- Top Hobbies: Wine collecting, especially Napa Valley
- Best Diversions: Trout fishing, tennis, golf
- Prefers: Phoning to texting (“You don’t get the same flavor with texting. It takes away from the interpersonal relationship.”)
- Exercise: Pilades twice weekly; running, swimming, exercise-biking each once a week
- Favorite Salad: Cobb
- Real Secret to Weight Management: Cutting back on bread and sugar (“Amazing!”)
- Favorite Books: Military history, particularly Civil War, World Wars I and II
- Board Member: Teach for America (former chair); Academy of Finance
- His Office Attire: Navy blue or gray suits only and a tie (“I’m colorblind, so all my ties go with both navy and gray.”) Socks: black.