First Coast Success: Margaret Black-Scott, Beverly Hills Wealth Management
Margaret Black-Scott was among the first women to serve as a stockbroker in Jacksonville and was promoted in the 1990s to lead the Morgan Stanley office in Los Angeles.
Mag, as she is known, is a graduate and trustee of Jacksonville University, where she earned her MBA, and she returns regularly to Jacksonville for business and family reasons.
She rose in the ranks at Morgan Stanley, retiring as chairman of the Global Wealth Management division. She created Beverly Hills Wealth Management two years ago and is expanding that. She opened a Jacksonville office in October.
The Daily Record interviewed Black-Scott for "First Coast Success," a regular segment on the award-winning 89.9 FM flagship First Coast Connect program, hosted by Melissa Ross.
The interview is scheduled for broadcast this morning and the replay will be at 8 p.m. on the WJCT Arts Channel or online at www.wjctondemand.org.
The following are edited excerpts from the full transcript and some additional information.
You were born and educated in England. What brought you to Jacksonville?
I came to this country because my first husband was from this country. We lived in Houston and Southern California, which is where I became interested in the stock market and originally started my career. I had been in the business for a little less than a year when (marine contractor) Murray (Black) came to Jacksonville to look at a job deepening and widening the St. Johns River. He started as a consultant and ended up getting the contract to do it, so he called me and said, come on we are moving to Jacksonville. So my fledgling career in California was over and I started over again in Jacksonville and it was great for 21 years.
Which firm did you start with in Jacksonville?
In Jacksonville I started with Thomson McKinnon Securities. It was the smallest of the New York Stock Exchange firms and I had come from a small boutique in California, so the idea of being in any larger firm was just terrifying to me. I was probably 2 1/2 years with Thomson McKinnon and I was recruited to what was known as Dean Witter. I became a chairman's club producer, which is our highest rank of percentage of productivity, and I was very fortunate in that my late husband had to work away a lot so I didn't have anything to do other than work and study and study and work. So it paid off.
You were here for how many years?
Twenty-one years before the company sent me to California. I was going for three years to take care of a situation that we had in our flagship and our office in Beverly Hills and I was to be coming back to the East Coast. That was in March of 1996. We stayed because along the way, Dean Witter bought Morgan Stanley and the job kept expanding. We did very well in Beverly Hills. We had a fantastic group of people. We tripled the revenues and we increased the profit by 10 times. They just kept leaving me where I was. Eventually I ran the Western Division, which is one of the four divisions of Morgan Stanley. We were the most profitable. I had about $189 billion under management. We delivered an 18.6 percent bottom line. It was a lot of fun every step of the way, which was probably why I had withdrawals when I finally retired.
You had some major changes.
I was widowed 8 1/2 years ago. That's a life-changing event. You start to wonder about what happens next. I was very occupied with my career, and it was a godsend. My husband had been ill for several years before he died, so having something to do that completely occupies you mentally and physically was very, very good. After Murray died, I was busy with my work and after about six months I was introduced by mutual friends to my present husband and life begins anew.
Talk about your present husband. You've been married seven years.
My present husband is David Scott and he is a fascinating man. He's a West Point and MIT grad. He was a fighter pilot, he was a test pilot and he went into the astronaut corps and he flew into space three times — on Gemini 8 with Neil Armstrong, on the Apollo 9 with Jim McDivitt and Rusty Schweickart and then Apollo 15, when he walked on the moon and was the first man to drive on the moon.
I had gone to a dinner one Saturday evening and a friend said there was a cocktail party and dinner for Apollo astronauts and Soviet cosmonauts. I went because I was invited by Patty and (astronaut) Scott Carpenter, who are longtime friends. She said, oh have you ever met Dave Scott? And I said no, who is that? She said he is one of the Apollo guys, and I said, what's that? She said they are the ones that went to the moon. I may have been the only person in the world that didn't know that, but I didn't know that.
We were in the room about six feet from each other and she whispered, he is single and so are you. So that was our big setup. We spoke very, very briefly and we were seated at different tables. I left as soon as dinner was over, but we had very briefly talked about business and I had given him my card.
He was living in London and he sent me an email when he got back to London. It was sort of like that Tom Hanks movie, "You've Got Mail," because we emailed and by the time he came back to this country to do a special on National Geographic, we had come to know each other quite well and found we had very similar interests.
He said, 'would you like to go out for dinner on Friday evening? I'll be in LA.' I said certainly. When do you get to LA? And he said 2 on Friday afternoon, and I said, you aren't going to feel like going out for dinner, why don't you come to my house and have dinner? I was horrified with myself that I had asked this strange man to dinner and I had not ever spent any time with him. We were married seven months later.
You must have worked with a lot of famous people in Los Angeles.
I can't name any of them now because it would spoil the confidence that they have with us, but we have worked with different people over the years.
We worked with a famous boxer and he didn't understand that we didn't actually keep the money in a bottom drawer or something. We have had football players who make a tremendous amount of money, but typically very, very quickly. You try to talk them into setting aside half the money, but with certain athletes it is very difficult. With people who have come from absolutely nothing and suddenly have a very great deal of money, it's hard for them to grasp that it can go away. So we need to set it aside.
As far as the movie-star client base is concerned, typically we do business with the business manager, although a few of them will come in once in a while.
You've had a lot of memorable experiences in your career, and one in particular is you were in New York City on 9/11. Do you think about that experience a lot?
Yes. I can still get emotional about it. We saw so many people die, we saw such destruction, and you never forget that. It's a reminder of the fragility of life because we all think we are going to live forever. You find out very quickly that is not the case.
But you also see the great part of people coming together. New Yorkers all were of one. What can I do to help? What can we offer? What can we do? That side of it was very, very humanizing and gave you great hope.
We drove across country (back to California). It took us several days to be able to find a vehicle to drive and we drove a 29-foot motor home and that was an experience because I had never been in a motor home and certainly never contemplated driving one. Three colleagues and I did this trek across the country.
We fled New York. We picked up the motor home on a Friday at 4 in the afternoon and we arrived back in Los Angeles at noon on Monday.
It was very illuminating on Saturday morning. We stopped at a truck stop somewhere and we were clearly the out-of-towners. We had this dirty 29-foot motor home and on the back we had stuck a sign that said 'we survived 9/11 New York City.' It was so reassuring that there was regular life outside New York City because we were bound up in the fact that what was going on was a terrorist attack. The idea that in the middle of the country there was life going on as usual was very warm and reassuring.
Did you do some of the driving?
I did. As soon as we took off from New Jersey, it was a bare-bones charter of a bus, so we had to stop at Kmart and buy pillows and blankets and towels. Then we stopped and bought food. In the few days since the towers came down, I had stopped everywhere I could to get money, so I had a lot of cash. I knew that we could potentially be stuck somewhere and need money, so I was the banker.
The minute that we actually set off, I fell asleep on the bed in the back and I slept until 2 in the morning, waking up when we stopped for gas. The fellow who was driving said, 'I am exhausted, I'm done,' and I said, oh I'm wide awake, I'll drive. He said, 'have you ever driven anything this big before?' And I said no. He said, 'well just be careful and keep the speed limit until you get used to it.' So I got behind the wheel and off I went.
America travels at night and if I had stayed the speed limit we would have been run off the road or I'd still be out there, because the 18-wheelers would go whipping by at 90 or 100 miles per hour. I finally got between two of them and off we went together.
Every once in a while I would think, this is really stupid because if I blow a tire or they do, this would not be a good ending. That was immediately followed by 'the good Lord did not get us through 9/11 to have us lose our lives on a freeway heading west.' And he didn't. We got home perfectly fine.
You returned and resumed your life. Talk about Beverly Hills Wealth Management. You retired from Morgan Stanley and took the year off because of a non-compete. How did that unfold?
When I signed the non-compete when I left the firm I thought that was so redundant because there was no way I would be coming back in the business. I was tired, I was done, I'd had a great career. I had a good time. I enjoyed my job.
David and I had been talking about whether or not I would retire at the end of '08 or '09. It turned out to be '08, and then the firm asked me to stay until the end of the year and I did.
The first few months (of retirement) were spent sleeping. Having woken up at 4:30 every morning for years, it was really good to still wake up at 4:30 but be able to roll over. I'm a newspaper-holic, and I was able to read all of my newspapers in the morning. I knew more about the business from reading about it than I had ever known before because before I hadn't had time.
But then I didn't have anyone to talk to about it. My husband is very smart but he sort of runs out of interest in my world relatively quickly. So I decided I had to do something.
I've always been an active volunteer, so that was not going to be the sole answer for me. I looked at starting a bank, and if you remember, '08 was really in the midst of the banking crisis.
I always planned to put a wealth management firm within a bank. People said you're really good at that, why don't you do that? I morphed into it, but with a difference. This time it was an independent channel.
The independent channel means that you can offer unconflicted advice to people because we gather our information from all around the world. We are able to offer the best of the best to our clients. That was a big piece of it.
As we have seen over the past several years, there are mergers and when you merge large companies, something has to go. It is going to be the real estate, a merging of the systems and the merging of the people. To pay for all of that, the client has to have increased fees, reduced service and generally more narrow offerings from the major (investment) houses themselves.
Major houses can offer some terrific things, but not everything is terrific and clients were very frustrated and I was one of them by not being able to get answers to questions in a timely manner, if at all, and being charged more for getting less, so there has to be a better way.
Back when I began in the business, it was very important to take care of your clients. The clients pay your bills — that gets forgotten. We started a firm with the idea of offering unconflicted advice in a completely transparent manner with only trusted advisers, people with very, very good reputations who have been in the business for a long time.
We have partnered with primary custodian Fidelity Investments and we also provide our reporting through Black Diamond (Performance Reporting), a Jacksonville-based company that was purchased by Advent Software about a year or so ago, so that our clients have a completely holistic approach to their finances. We like that, the clients like that. It's an approach that works for our clients. We are two years in. We have 16 employees and five locations. (Jacksonville is the fifth location.)
What is your vision for the company?
My vision is to build it to about $10 billion or $12 billion in assets under management and have probably 100-120 financial advisers in locations that are relevant around the country. Jacksonville, because of my connectivity here, was one that we always had in mind. I can see that we'd be in some other major cities. It's responding to the clients, it's taking care of the clients and taking care of our advisers who take care of their clients.
How often are you here?
I'm here at least three times a year because of being on the board of trustees at Jacksonville University, but I'll be spending more time here. You know, in California we are taxed to death, so there will come a time where we'll need to move our corporate headquarters out of California.
Would you be looking at Jacksonville for that?
It certainly would be on the list of states and cities to consider. Texas has been aggressive in pursuing businesses because a lot of businesses are fleeing California to Texas and to Nevada. I like Texas, my husband is a Texan. We have to look at quality of life, availability of people and availability of real estate, so Jacksonville is up there.
Do you have advice for anyone who might want to start a business?
My first comment would be to put your business plan together, think about it hard and think about it some more. Put your budget together. Put your timeline together. It will take twice as long and cost twice as much and other than that, do it. For heaven's sake, do it. We need more entrepreneurs in the country. It's what built the country.
But follow your dream and follow your heart and follow your passion. Don't do something for the money. Do it for the love of what you do and the right result will come out. I'm a great believer in that.