Morgan Stanley Freezes Forbes Ranking Ties Over Executive Payment

Morgan Stanley suspended its involvement in Forbes wealth advisor rankings following the publication of disclosures that former Forbes Chief Content Officer Randall Lane accepted a $6 million payment from Shook Research founder RJ Shook.

The $8.1-trillion wealth manager paused its participation over transparency concerns following Lane's July 23 departure. The payment came after Shook Research sold a controlling stake to private equity firm PPC Enterprises last year.

Shook Research provides the underlying data for several Forbes list offerings, including the nationwide flagship list of America's Top Wealth Advisors.

"My actions were taken with the best intentions, but ultimately the payment was a mistake," said RJ Shook, Founder, Shook Research. "I deeply regret that this has raised questions about the integrity and independence of Shook’s rankings."

Shook stated that Lane provided guidance to him after they met in 2011, including facilitating the Forbes partnership in 2016 and helping with the sale of his firm.

"He provided professional advice and guidance to me. In 2016, Randall helped to facilitate the partnership between Forbes Media and Shook Research. Later, he provided assistance in connection with my efforts to sell the company," said RJ Shook, Founder, Shook Research.

Industry experts noted that the fallout creates wider reputational challenges for advisory firms relying on magazine recognition programs.

"This is the bit I find hardest to reconcile," said Emma Smith, Partner, StreetCred. "Forbes says there was an undisclosed conflict serious enough to fire its chief content officer, while simultaneously saying the Shook relationship continues on, and apparently nothing fundamental about the rankings needs to change."

Smith questioned the lack of details regarding the executive dismissal and editorial boundaries.

"Why not explain exactly what the wrongdoing was, where the boundary was crossed, and why that boundary could not have affected anything else?" said Emma Smith, Partner, StreetCred.

She emphasized the need for clarity between commercial arrangements and evaluation processes.

"When you’ve built this enormous commercial machine around the winners, it behooves you to be transparent about where judging ends and selling begins," said Emma Smith, Partner, StreetCred.

Smith added that commercial dynamics create ongoing questions for independent media organizations.

"The harder question is how far that subsequent commercial relationship extends and whether it can ever affect future rankings or independent editorial treatment," said Emma Smith, Partner, StreetCred.

Morgan Stanley internal communications indicated the bank required additional clarity before continuing its involvement.

"As the firm continues to monitor the situation, we remain focused on ensuring that the organizations with whom we partner uphold the high standards of integrity and transparency that are essential to Morgan Stanley and its clients," said Barry Krouk, Chief Operating Officer of Field Management, Morgan Stanley Wealth Management.

Marketing consultants advised wealth firms to review their use of external media accolades.

"I applaud Morgan Stanley and hope everyone follows suit," said April Rudin, Founder and President, The Rudin Group.

Rudin suggested that further details regarding external industry payments could surface.

"I would not be surprised if there were other payouts made, and this is the beginning of this story, not the end," said April Rudin, Founder and President, The Rudin Group.

Market analysts also cited broader changes in how media brands monetize professional titles and list programs.

"Once people start hearing ‘featured in Forbes,’ and reacting with a shrug, the game is up ... Forbes used to be a signal; now it's increasingly just a very expensive distribution channel wearing an old tuxedo," said Lee McCabe, Partner, Claymore Partners.

Industry observers pointed to earlier concerns over contributor models and list selections as contributing factors to shifting public perception.

"There is arguably a cumulative reputational issue here," said Emma Smith, Partner, StreetCred. "Forbes doesn’t have quite the unquestioned cachet it once did, and 30-Under-30 – conceived by Lane – is a good example. It has become the subject of considerable skepticism after some spectacularly bad picks … Another controversy involving a Forbes list inevitably adds to that broader erosion of the halo."

Morgan Stanley has not announced a timeline for re-evaluating its participation in future rankings.